Industry Spotlight: Banking Tech Trends
In an increasingly competitive market, the banking industry is seeing some interesting technology trends, especially with a rise in popularity of smartphones and mobile applications. Trust factors are also declining, so it’s more important than ever to build a personal relationship to build a loyal customer base. Technology is becoming more interlaced with consumers’ lives, and all industries, including the financial industry, will be impacted with new technologies and trends in the course of the next few years. Those companies that invest in IT now, even with the downturn, and adopt these emerging technologies will have the opportunity to establish themselves as a leader, and lend themselves a big competitive advantage.
We have compiled a list of the top five tech trends that we think will have a positive impact on the banking and financial industry. Perhaps it is because we love technology, but we always think that technology should improve things in some way, otherwise – why would one invest in it?
1. Database Development
Many banks are relying more on data to build better relationships with customers. Banks are using the data to track behavior to offer their customer’s services based on their preferences. As a result it has become important to develop custom databases to hold customer data. Most important, however, is data security so banks should choose a development partner with a good track record of handling private and sensitive data. Security is a big concern online now, since the level of electronic theft has surpassed physical theft in 2010, although only by a small margin. Security is especially difficult in emerging International markets, with China having the highest fraud levels online.
2. Mobile
Mobile is becoming more a part of consumer’s everyday life, and the banking industry is starting to notice. Many banks already offer mobile banking, and there are numerous mobile apps for those with an interest in finance. One of our client’s, Happy State Bank, has taken advantage of this trend by building an informational app for iPhone™, Android™ and BlackBerry® in order to reach to maximum number of customers on all platforms. Mobile apps are a great way to offer location information, branding messages and mobile banking.
3. Social Technologies
Social technologies will soon be integrated into a company’s existing applications, and it will become exceedingly important to have a cohesive strategy. How an organization integrates its CRM application with all the social media out there can be the difference in building a loyal customer base or not. All these portals where a company distributes its information to the public should be managed with a collaborative approach to keep the message consistent. And banks that aren’t in the social media space may soon find themselves too far behind to play catch-up.
4. Cloud Computing
Cloud computing allows the industry to buy storage capacity on demand, saving banks a lot of money used to buy rack servers and space to house datacenters. Banks no longer have to scale to their anticipated max load, but rather run exactly the right amount of hardware. The cloud can also help banks bring new capabilities to the market more quickly. But, there is still the security concern with cloud computing, as is the case with traditional datacenters. You have to be vigilant when determining a datacenter to entrust with your customers’ information, whether or not they provide cloud solutions, and these datacenters must be forthcoming with how they address security. If they aren’t, you shouldn’t host with them.
5. Online Banking
OK, so online banking is a bit obvious. Most banks offer online banking, and if they don’t, they likely will soon to stay competitive. But we had to mention it, because online banking isn’t going anywhere especially with the success of some banks that are completely online, with no brick-and-mortar storefronts. Online banking gets a little tricky when it comes to customer loyalty, since you lose a lot of the “personal touch” online. So a good strategy to offer customers capabilities and services based on personal preferences can go a long way in retaining their loyalty.
So that is our take on the most popular IT trends in the banking industry (which to be fair – most industries are facing these same trends). We have quite a few clients in the industry, and therefore we keep tabs on what is happening in the financial market so we can be the best development partner and offer problem-solving solutions. Are you in the banking industry? What trends are you seeing?
