By Lyle Solomon, Principal Attorney and Vice President at Oak View Law Group 

As people have embraced digital currency, physical cash will be utilized less. Consumers might perform purchases using a variety of wearable gadgets, removing the need for actual debit or credit cards entirely. Many transactions will be free of hassle. Consumers can get virtual assistants to pay for their dry cleaning and groceries, evolving more within the next ten years. Banks and credit unions should search for ways to interact with these voice-activated assistants to execute financial activities and even provide customized advice in real-time.

Banks are already experimenting with a new horizon of possibilities, ranging from artificial intelligence to blockchain. What does this signify for global banking in the future? How will this enormous technological advance affect banking in the next ten years?

The rise of app-based baking

In recent years, personal finance applications have become increasingly popular.

App suppliers range from banks offering their services to single developers producing stand-alone savings, budgeting, or money management apps. This marks the first wave of app-only banks.

These companies provide current accounts that can only be controlled through a phone or tablet, with customer care offered by staff via a live chat service. The facility to temporarily block your card from your app if it is lost or stolen is one of the significant improvements provided by app-based challenger banks. Instead of phoning customer support, customers can obtain a replacement with a few touches on the screen. Simple modifications like these could improve the services given by traditional banks. Some conventional banks already assist customers by allowing them to photograph checks rather than bringing them into the branch.

While challenger banks may not deliver the same levels of customer service as regular banks, their very presence may inspire existing banks to embrace a digital-first strategy and continue to innovate.

Traditional banking will stay forever.

Many people forecasted the death of traditional banks a decade ago. Regulatory protections, government assistance, solid customer relationships, and strong ties to the broader economy were among the reasons that helped them recover. Despite all the hoopla about how new financial technology (FinTech) firms would disrupt banks and render them obsolete, history predicts that most FinTechs will vanish by 2030, while many old banks will endure. Despite the constant hunt for new business models, the old global banking paradigm is not going away anytime soon. These new models frequently fall short of their promises. Bank/retail relationships were all the rage a decade ago, and they appeared to be a method for banks to broaden their reach into consumers’ daily shopping routines. Instead, most of these collaborations failed because banking is highly regulated, complicated, and tough to operate alongside a retail firm. Several recent bank-telecom and bank-FinTech partnerships may succeed.

Banking will be more secure.

Many telecom and technology companies, on the other hand, will suffer in banking over the next decade. Most banking activities, we believe, will remain in the hands of banks by 2030. Banks are still battling to access their data and make it actionable after ten years. Recently, artificial intelligence (AI) has been touted as the way to extract more excellent value from customer data. Simple AI applications, such as fraud detection, are already in use by banks.

Banks will employ AI more.

The issue is that the emotional component of money, which means a wide range of possible outcomes when making decisions, makes predictive analytics difficult for banks to use. It differs significantly from how corporations like Amazon and Google use predictive analytics. Some banks will enhance their consumer data management, but by 2030, banks will employ AI more.

People will expect more digitalization from the Banks.

The rise of online purchasing has sealed this shift. Millennials are the ones who are driving digital adoption. Generation Z, and the first generation of the digital world, will adopt new technology quickly. By 2030, most clients will interact with banks in a completely different way than they do now, and banks that fail to adapt will face the same fate as many shops today. Today, most large banks result from a lengthy history of mergers and acquisitions, and mergers and acquisitions will continue to be a popular way for banks to solve future strategic difficulties. Banks with excellent innovation capabilities will be able to buy banks that cannot innovate but still have value in clients, assets, and deposits over the next decade. Banks that lack innovation capabilities can purchase these capabilities from FinTechs to avoid becoming acquisition targets. There are indicators that traditional institutions are becoming more digitally friendly in the future.

Conclusion

Banks provide advice and support to their customers through an online forum and various social media services, keeping with the evolving consumer landscape. The number of apps that assist clients manage their finances daily has increased elsewhere.

This includes programs that round up a user’s transaction spending to the next unit and deposit the difference into a savings account. Simple developments like this can provide customers with a new, simple way to save money if they can’t afford to save hundreds of dollars each month.

Author bio: 

Lyle Solomon has legal experience as well as experience in consumer finance and writing. He has been a member of the California State Bar since 2003. He graduated from the University of the Pacific’s McGeorge School of Law in Sacramento, California, in 1998, and currently works for the Oak View Law Group in California as a principal attorney.