Technology plays a pivotal role in the way people do things. It’s equal to the tools humanity used to hunt and gather resources thousands of years ago. Having the best technology around means becoming an industry leader today. This is why millions of banks are investing their money into tech. As a result, technology is dictating the way banking is today. It will continue to dictate the future of banking for many years to come.
If you’ve been banking quite recently, you might have noticed a new trend in the market: digital-only banking. It’s more convenient than traditional banking and feels more efficient too.
Digital-only banking is taking over the industry because of COVID-19. However, many experts believe that it was inevitable. It has been around for quite some time, and the pandemic just accelerated the inevitable. This is partially due to smartphone purchases and the surge of apps in the past few years.
Smartphones are getting better, and people know it. Smartphones sales have been increasing since 2005, and they didn’t decrease until 2021. This is partially due to the pandemic and the that most people already have smartphones by then. In addition, the improvement of smartphones means a surge of better and more efficient apps. Some of these apps are related to the banking sector.
Many digital-only banks invested millions of dollars into their apps, some even investing in new technologies to improve smartphones. They know that smartphone and digital-bank usage positively correlated with one another, so it’s a worthwhile investment. Moreover, many mortgage lending companies did the same thing. They invested in both apps and websites to improve the efficiency of their business.
Technology drives digital-only banking, but it’s not the only thing affected in the banking sector. For example, the rise of cryptocurrency due to better computers also affects the industry.
Cryptocurrency is a big deal in the financial world. Many people claim it’s the next big thing in the sector, while many claim it’s a hoax. However, the statistics show the whole story and that cryptocurrency will be here for years to come.
Many countries are investing in cryptocurrency, and they are doing this by investing in more efficient computers. As graphics cards continue to improve their performance, more crypto-miners purchase them at a premium. Many manufacturers are trying to stem the tide because of the recent shortage of video cards. Still, in reality, they don’t want crypto-mining to stop. It’s good for business. So what does this mean for the banking sector?
Some banks are pressured enough to let cryptocurrency exchanges happen under their establishment. Many more conventional banks are investing in crypto-wallets to get a share in the market. Some are funding crypto-miners, while others are dedicating their services to cryptocurrency. The sector is aware that they have to adopt cryptocurrency even if it is unstable.
The rise of cryptocurrency isn’t just attributed to better computers. Big data also has a role to play in it.
Big data is the next big tech in banking, and almost every bank is going nuts for it. It increases security, makes transactions more efficient, and analyzes information better than before.
Data plays a significant role in the world of banking. The faster a bank can analyze data, the more it can become an industry leader. Conversely, being a day behind from analytics can mean billions of dollars lost. This means that if you want to succeed in the industry, you need to have fast analytics working on your side.
This is where big data comes in. Big data plays a huge role in analytics because it can analyze millions of data in seconds. Moreover, it ensures that this data remains private, useful for the already-privatized crypto market. It’s also helpful for bank transactions, especially when their accounts are on the line. A single leak can mean the end of someone’s career.
This tech is serious business, and getting billions of dollars in investments—having it can make the difference in a bank’s future.
Future of Retail Banks
With all of these technological changes, what does it mean for retail banks? Well, they are also benefitting from all the improvement in tech, but they are certainly lagging behind. For starters, their numbers have started to dwindle even before the pandemic.
Running retail banks is expensive, so why have one to make almost every transaction done by a program? The only thing you need to invest in manpower is customer service, and AI can accomplish everything else. This is the problem that retail banks are now experiencing, and only the future can tell whether they’ll still be around in the years to come.
Technology is shaping the world of banking as everyone knows it. It’s time for your bank to adapt or risk being left behind this year.