With the appearance of digital technologies, the banking industry changed the way of payments as well. People from all over the world start to use their mobile or computer devices to buy something. The cashless transactions are becoming more and more popular nowadays. For this reason, banks should follow the latest trends in payments and adopt them in their system. Artificial Intelligence (AI), mobile payments, and smart contracts are the key features that will make a revolution in the financial. In the article, DjangoStars Fintech Development Company prepared the information about three FinTech technologies that might change the banking industry.
1. Artificial Intelligence
Artificial Intelligence pops up FinTech domain, creating new methods of protecting payments and securing transactions. Fraud detection and money laundering are the main problems for the financial area. So how AI will transform the future of the banking industry? In particular, chatbots and banks inner structure are the important characteristics of the AI technology that might improve the security system. Chatbots are useful in the customer service domain, and a banking industry also needs them. When clients want to know the interest rate or information about loans, this system can help them. The banks that tried chatbots in their customer service system were satisfied with a final result. The other advantage of AI has improved security. How can it protect the banking system? The answer is simple in this case: AI has algorithms decrease risks in financial transactions that make them advantageous. The bank’s inner structure includes authentification system and biometric technology that ensure data protection effectively. All these elements are essential for the banking industry, and AI is a revolutionary part of it.
2. Mobile Payments
With the appearance of digital wallets, the physical presence of banks isn’t necessary nowadays. The examples of Apple Pay and Google Pay prove the fact that mobile payments will replace cash ones in the nearest future. How can it change the banking industry, then? In the USA, mobile payments might reach the cap of $142 billion in 2019. Does it sound great, doesn’t it? There are no doubts that banks need mobile payments as well. Mintel conducted a study in which 60 percent of people were active users of mobile app payments. So what does it mean for the banks? In general, they should change the credit card system and adjust it to mobile payments. The other way of solving it is cooperation with digital companies like Alipay that adopt their payment system into banking one. The virtual wallet is the option that the banks use as an alternative for replacing mobile payments. For instance, a Chinese company, Yu’e Bao helps clients save money on their banking accounts. So what are the additional aspects that make mobile payments perspective for the banking industry? Online payments and their contactless form are beneficial for app functionality as well. These elements will modify the banking industry in the future.
3. Smart Contracts
The banks can use smart contracts for remittance, as they don’t have any fee for transactions. When blockchain technology appeared, it improved digital strategies implementation. Smart contracts are effective for financial transactions in banks. In particular, their criteria contain the conditions that control costs and their delivery. For the banking industry, smart contracts are important because they will provide transparent payments for clients. Such a change in financial services will simplify the number of commercial operations. The money balance on different accounts can also be well-regulated by smart contracts. So the future of the banking industry is promising, and it will revolutionize the way of paying and making transactions in the nearest future.