by Jack Vonder Heide
Which new technologies will change banking and which will prove to be nothing but hype? There are several emerging trends that could have a significant impact and banks should carefully monitor them.
First, the cost of data storage has dropped exponentially during the past decade and is predicted to drop at an even steeper rate over the next few years. This means that banks should be able to store literally every bit of information they have, indefinitely, at a very low cost.
Second, data analysis and logic tools are becoming more robust, more intuitive and easier to use. Banks will be able to make practical use of the data under their control without a lot of IT expertise. For example, if a customer was coming in for a meeting, their banker could request a two-page summary of the client’s background and banking relationship and the report would be generated instantly.
Third, custom marketing tools will enable banks to promote the exact services and products their customers need at the exact time when they are most likely to buy. If a bank offered a zero percent teaser rate on a credit card for 12 months and wanted to market the card to existing customers who had credit cards with competing banks, a few simple commands would set everything up. When an existing customer went online to pay their monthly bill for a competitor’s card, they would be displayed with personalized information on how much money they could save by transferring the balance to a new card.
Fourth, mobile payments will become more flexible. Traditionally, when a business applies for a credit card with the bank, a list of authorized users is provided and each user is issued his or her own credit card. In the future, customers will be able to authorize any employee to make one-time charges on the company account. For example, if a restaurant wanted to authorize a kitchen worker to purchase dishwasher detergent at a wholesale warehouse, a QR code could be sent to the employee’s smartphone. When the employee arrived at the point of sale, the QR code would be scanned and a one-time charge to the company’s account would be authorized.
Fifth, new advances in authentication technology will make account takeover more difficult. Voice recognition will enable a mobile user to access an account by repeating three random words that the system generates. If the words are spoken in the correct sequence and the voice print matches what the bank has on file, the customer will be authenticated. Another method allows the customer to use a smart phone’s camera to take a picture of their eye. The photo is compared to the bank’s photo and, if they are a match, account access is granted.
These are just a few of the promising technologies we can expect to see during the coming years. It is important for every bank to plan a technology strategy that provides outstanding customer service while maintaining proper cost controls. We are in for some exciting times!