The banking sector has been here for centuries. This industry continues to grow today and is valued at around $7 trillion worldwide. One of the reasons behind this staggering number is the industry’s swiftness in embracing new technologies. Innovations like AI, cloud computing, and blockchain are reshaping operations in this vital sector. In this article, we’ll take a look at four tech trends that are certain to take the financial industry to the next level.
Artificial Intelligence
In 2024, AI made the most headlines in many industries, including finance. We expect this trend to spill over into 2025 as the banking sector moves to harness the power of AI automation. This year, more banks will use AI to study customer information and provide personalised banking services.
The impact of AI is already evident in various sectors. For instance, Germany’s online casino market has been quick to adopt AI, offering players tailored experiences that cater to their preferences. Platforms like online casinos Deutschland use this technology to recommend games based on playing patterns.
Similarly, in banking, AI can analyse savings, spending, and repayment trends to provide customised financial solutions. This technology has the potential to revolutionise how banks interact with their customers, making services more relevant and user-centric.
Here are other ways that AI will improve financial services.
- Automatic fraud detection and prevention.
- Analyse credit scoring and risk assessment.
- Automated customer support through AI chatbots.
- Send out automated email campaigns to specific targets.
Blockchain
Blockchain is slowly creeping into the banking sector to provide security and transparency benefits. For example, many banks are rushing to deploy smart contracts, which don’t need human intervention to execute. These deals are written using computer code and become active after fulfilling specific conditions. Remember, you cannot edit blockchain-based smart contracts.
However, the most common application of blockchain is cryptocurrencies. A report by Statista reveals that there could be 800+ million crypto investors this year. This may force banks to process crypto payments. Institutions like JP Morgan Chase and DBS Bank support transitions in coins like USDT, USDC, and SHIB. Even central banks may launch their cryptos soon.
Secure Data Storage with Cloud Computing
The financial sector handles large volumes of sensitive information. It’s vital for this sector to provide secure and reliable data storage solutions. That’s where cloud computing steps in. This technology allows banks and financial companies to store and access their data on cloud services. Interestingly, 91% of financial companies are already using cloud services.
Here’s the thing: most cloud services implement strict data privacy and security policies. These measures ensure that customer financial data is safeguarded from online hacking and cyberattacks. Cloud services can also help financial institutions reduce their data storage costs, thanks to the pay-as-you-go subscription model. Moreover, cloud data is easy to analyse and manage, which can enhance fraud detection.
The Emergence of Green Banking Institutions
This year, sustainability will likely be the buzzword as most banking technologies enter the implementation phase. Expect financial regulators and advocacies to push the industry to embrace green banking. Growing customer demand is also driving the banking sector toward environmentally friendly solutions. According to a report by Personetics.com, seven out of 10 customers prefer banks that offer green services.
Today, green banks are already thriving in several first-world countries. Climate First Bank is an excellent example of an eco-friendly bank in the United States, providing savings and checking solutions. Their business loans mainly focus on funding solar energy, EV charging, and eco-friendly certified real estate investment.
Other sustainable banks include:
- Beneficial State Bank – US
- Ando Money – US
- Barclays – UK
- Triodos Bank – UK
- Bank Australia – Australia
Conclusion
We expect these top tech trends to impact the banking sector significantly. Others may include biometric authentication, quantum computing, and open banking. Most institutions will view these innovations as strategic enablers, helping them unlock more financial opportunities. The future of the financial sector is in the safe ‘hands’ of technology.
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