Rahul Singh, President, Financial Services, HCL Technologies
Looking back, the birth of the credit card was a seminal moment in the history of financial services. A piece of plastic, with no intrinsic value of its own, made vast amounts of money conveniently portable and secure. The credit card brought along other major advantages such as readily available credit and the ability to retain loyalty. But the real reason credit cards succeeded? They virtualised currency, making it simple to use money.
We are now at the threshold of an even more radical era where money is made simpler than ever before at the hands of technology.
All transactions and financial services will be digital, faster and integrated into applications and devices, making money accessible with greater convenience. Physical barriers will vanish. Accurate and simple real time payments will become default. Finally, biometrics could take over, making your hand your wallet. In China, biometric payments already have a face: at KPro, the Chinese versions of KFC in Hangzhou, patrons simply smile at a camera to complete payment.
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Technologies such as artificial intelligence (AI), machine learning, IoT, robotics, blockchain, cloud, open environments, fintech and shared environments are helping financial services providers along the path to the ‘Money Made Simple’ future. Along the way, financial services firms are discovering that technologies and innovations are future-proofing them from fintechs. Equally encouraging is the fact that these innovations are making them more customer centric without the need to go shopping for new technology skills. No financial services organisation can resist these upsides for long.
The idea of ‘Money Made Simple’ rests on four factors that organisations need to use as guiding lights in their own transformation:
- Money must move fast. The most important (and often only) thing customers want from transactions is speed.
- Money must be accessible seamlessly. It should be possible to initiate and complete transactions from chat windows, social networking applications, mobiles, cars and just about anywhere the need for a transaction arises.
- Financial services should be networked. Services such as insurance and loans depend on seamless and secure data sharing between third party service providers, making networks critical to the success of one-stop providers.
- Transaction processes/ infrastructure must go digital. ‘Digital first’ is not an empty buzz phrase. It is transforming the retail banking industry where digital channels are making expensive branch sites and ATMs irrelevant.
Money Made Simple in real life
How do these four factors manifest themselves in the real world, and what opportunities do they afford financial services companies?
The convenience of messaging apps for transactions: Millennials’ hunger to merge communication with transactions has led to the development of special tools to automate and integrate payment processes into messaging applications. A scaled-down and simpler version of the same innovation also exists in the form of money transfer via SMS, which can also be used to retrieve account information.
Democratising top quality investment advice driven by AI: Great fund management has so far only been accessible largely to high net worth individuals, but AI can democratise it. Companies have been using technology to personalise AI-enabled investment advisors, which monitor market signals and rapidly take the best decisions for their customers.
Letting out the payments genie with IOT: Today, every time a payment is made, cash is handed over, a credit card swiped or a mobile wallet or an app opened, but IoT is making all manner of payments faster and simpler. For instance, a car can potentially pay for parking, toll charges, petrol, and maintenance by using its own embedded wallet. In essence, networks will make money accessible seamlessly, and forge partnerships that help integrate secure payments into devices. In fact, insurers can already track health data from wearables to accurately calculate health risks, giving better premiums to users with healthy habits.
Using real-time data: By analysing data from endpoint devices and social media in real time, more personalised insurance products can be created and accurate risk assessments can be made, leading to improved pricing and customer satisfaction. Organisations can also deploy intelligent chatbots that support customers in their decision-making process. These chatbots use mobile technologies, voice recognition algorithms and data to create almost-human interactions 24/7, cutting customer support costs dramatically.
Capturing customers with hyper personalisation: Using customer data, loans can be quickly personalised and the paperwork completed remotely, without the need for customers to take time out and visit their bank. Throw in an intelligent chatbot and the customer can have every query answered accurately and without delay.
The future is simple
Without doubt, the future of money lies in “Simple”. One recent research report on new payments, currency and banking said that 76% of millennials are looking for new forms of banking, 63% of US millennial consumers hardly ever use cash and 40% of Chinese consumers would like to interact with their bank using a smart speaker. Against the backdrop of these findings, there is no room for traditional banks. It is time to put all bets on “Simple”.