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The pandemic-led lockdowns have caused a surge in demand for contactless payments, accelerating the shift from cash to digital options such as mobile banking. According to the Digital Banking Attitudes Study by Chase, 99% of Gen Z and 98% of millennials use a mobile banking app for a wide range of tasks, including viewing account balances, checking their credit score and depositing a check.
The global mobile banking industry is expected to reach $1.82 billion by 2026. Banks and financial institutions are following suit by incorporating more sophisticated technologies such as Artificial Intelligence (AI), machine learning, big data, blockchain, etc., as a part of their strategies in order to continue staying relevant in our ever-changing world.
In this article, we will explore four major mobile banking trends to look out for in 2022 and the years to come.
1. AI-powered chatbots
Juniper Research predicts that banks will save up to $7.3 billion by 2023 in operational costs via chatbots. The advancement of machine learning and natural language processing (NLP) has paved the way for the mainstream adoption of chatbots in businesses. AI-powered chatbots are widely used to enhance customer support and at the same time, provide a holistic and personalised customer experience. In the mobile banking arena, AI-powered chatbots can be configured to execute more complex tasks besides answering customers’ queries. For example, providing personalised financial advice, sending bill payment reminders, warning users about a low remaining balance, and more! Chatbots in banking allow automated customer service, in a highly scalable manner, which in return creates a more consistent and superior customer experience.
Furthermore, AI-powered chatbots are intelligent enough to identify and learn customers’ behaviour through interactions while collecting relevant data. By analysing the insights, banks and financial institutions will be able to have a better understanding of their customers’ profiles. Through this, they can configure the chatbots to make product recommendations and introduce customers to new products and services based on their needs and interests.
2. Biometric security
In the COVID-19 era, security threats have evolved and are becoming more alarming each day. According to The Federal Trade Commission, credit card fraud increased by 104% between the first quarter of 2019 and the first quarter of 2020. Thus, a stronger cybersecurity system is needed and this is where biometric authentication comes into play. Biometric authentication was designed to enhance the security of sensitive data and facilitate compliance with financial regulations. Juniper Research forecasted that biometrics will authenticate over $3 trillion worth of payment transactions in 2025, and that fingerprint, iris, voice and facial recognition will be a critical component in offering compelling app experiences as mobile payments dominate the payment landscape.
Besides preventing unauthorised access to accounts, biometric security also ensures easy and convenient access to private information as there is no need to memorise and manually fill in the account credentials. With 56% of consumers trusting biometric technologies to authenticate their transactions, biometrics is expected to replace bank cards’ Personal Identification Number (PIN) and would render them obsolete in the near future. At this point, it would not even surprise anyone if vital points of biometric identification systems such as facial recognition, voice recognition, fingerprint scans, and iris scans become the go-to security standards globally.
3, Blockchain technology
Blockchain, in simpler terms, is a decentralised, distributed and public digital ledger that is used to record transactions across many computers, making it difficult or impossible to change, hack, or cheat the system. Blockchain technology is recognised as one of the most important mobile banking trends in the coming years. In fact, The Analyst Syndicate predicted that blockchain solutions for global businesses and governments will exceed a 50% compounded annual growth rate from 2022 to 2026, and by late 2023, the C-suite strategic business blockchain use-case planning for an adoption rate will have surpassed 70%.
The number of blockchain transactions is also increasing, and according to Statista, Blockchain.com wallet, a type of crypto wallet that makes purchasing Bitcoin possible, reached over 81 million wallet users as of March 2022. Blockchain is one of the core pillars that is powering cryptocurrency exchange, mainly used to maintain a secure and decentralised record of transactions. In mobile banking, financial institutions will be able to enhance the security of sensitive customer data as the system is built with the same level of security measures as the blockchain security solutions that protects cryptocurrency.
4. Cardless cash withdrawal
During the pandemic, people around the world showed an increased interest in contactless payment to avoid touching surfaces in public places. Cardless cash withdrawal is a great solution to cut down the point of contact when withdrawing cash from the ATM machine as most of the process can be done through a mobile banking app. All you need to do is just to take the cash from the ATM after performing most of the steps such as entering your PIN, withdrawal amount, etc., through the app itself. Near-Field Communication (NFC), a technology that allows devices in close proximity to each other to easily communicate and share data, and QR code scanning are what made this trend possible, as it makes it easier for customers to interact with the machines even with limited contact.
Besides that, cardless cash withdrawal will also enhance customers’ banking experiences. For example, customers now do not have to have their cards with them in order to withdraw cash, as in the past. Furthermore, they can also set up transactions in advance, thus reducing the time spent at the ATM (goodbye long queues!). Not only does this method makes cash withdrawals faster, but it also enhances security and considerably reduces the chances of card skimming, cloned card and other fraudulent activities due to the absence of a debit card during ATM transactions.
The Road Ahead
With the widespread adoption of innovative technologies, the banking sector is experiencing a rapid digital transformation. Mobile devices will become the primary channel that connects the financial industry to its customers. As smartphones constantly introduce new, unique features, consumers will be expecting more innovation in the area of online banking apps. This is especially crucial for Gen Zers and millennials who use mobile banking more than anyone else. The world is going cashless, banks and financial institutions need to keep up with customers’ expectations regarding the mobile banking experience, and quickly adapt so that they don’t risk being irrelevant in the future.
JurisTech is a leading Malaysian-based Fintech company, specialising in enterprise-class software solutions for banks, financial institutions, and telecommunications companies in Malaysia, Southeast Asia, and beyond.
As one of the Fintech pioneers in Malaysia, our vision is to enable financial inclusion for the financial industry with our diverse range of solutions. Check out Juris Mindcraft, our latest AI-powered technology that helps banks and financial institutions to transform their digital landscape. If you are interested in an intelligent NLP chatbot specifically engineered for banking and finance, check out Juris Anny.