With the widespread adoption of innovative technologies, the banking sector is experiencing rapid transformation. By employing software solutions, financial companies automate manual and repetitive processes, boost customer satisfaction, as well as ensure data security and compliance with regulations.
Additionally, using mobile banking apps, organizations are able to deliver a range of services remotely, which is especially important during disruptions such as the COVID-19 pandemic. Account opening and digital transaction completion are examples of operations that users can perform with just a few clicks on their smartphones.
In this article, software experts at Surf describe the main mobile banking industry trends in 2021 and years to come. We will also show you how it is possible to address business-specific challenges with bespoke software. Let’s get started.
Top 7 mobile banking industry trends in 2021 and beyond
1. Biometric security
Security threats have evolved in a time of coronavirus. The Federal Trade Commission informs that credit card fraud increased by 104% between the first quarter of 2019 and the first quarter of 2020. However, during the same periods in 2017, 2018, and 2019, the number of fraud cases accounted for 27%, which is nearly 4x lower, according to Credit Card Insider.
Biometric authentication was designed to improve the security of sensitive data and facilitate compliance with financial regulations. Using the recognition of the face, voice, fingerprints, and other, biometric solutions allow for preventing accounts and devices from unauthorized access. Furthermore, financial organizations can protect against identity theft, credit card hijacking, skimming, as well as phishing.
Juniper Research forecasts that biometric authentication will be used for more than $3 trillion of transactions in 2025, rising from $404 billion in 2020. Analysts also predict that the number of contactless mobile payments employing biometrics will jump by 520% during 2020-2025.
At the moment, biometric software is undoubtedly among the key online mobile banking trends for the coming years. To learn more about data protection, read our article about preventing mobile banking app security issues.
2. Artificial intelligence-powered chatbots
An AI bot is a software solution, which is programmed to execute certain tasks according to predefined scenarios. Using conversational technology, financial and banking institutions can speed up a variety of manual and routine operations, this way reducing response waiting time from an hour to seconds.
For example, an artificial intelligence chatbot can answer frequently asked questions, simultaneously process multiple incoming requests, provide requested information, and send complex issues to the required specialists or departments.
What’s more, organizations can employ AI chatbots to offer consumers personalized advice. With AI-powered bots, it is possible to ensure client support 24/7 while significantly cutting down expenditures.
According to Juniper Research, the use of chatbots in banking will allow for saving $7.3 billion in operational costs worldwide by 2023, up from an estimated $209 million in 2019. The number of successful banking interactions is projected to increase to about 3,150% during 2019-2023.
Experts report that bot incorporation in mobile banking apps will be the primary channel for the growing adoption of conversational technology. This will amount to 79% of chatbot interactions in 2023.
“Chatbots in banking allow heavily automated customer service, in a highly scalable way. This type of deployment can be crucial in digital transformation, allowing established banks to better compete with challenger banks.” — says Nick Maynard, research author at Juniper Research.
3. Mobile banking apps
The popularity of mobile banking apps is exponentially increasing. The COVID-19 pandemic has just accelerated this growth. With lockdowns imposed by countries globally, people have been forced to stay at home and use financial services from their tech devices.
In 2020, for the first time, over 55% of US adults accessed their bank accounts using smartphones. Analysts forecast that mobile payments will progress at a Compound Annual Growth Rate (CAGR) of 29% during 2020-2027, projecting to account for nearly $8.95 trillion by 2027.
By employing mobile solutions, customers can make loan payments, carry out transactions, settle an account, plan a budget, withdraw funds, manage payrolls and expenses.
In addition, financial institutions can deliver a variety of services online, boost efficiency, improve consumer satisfaction, and reduce costs. To safeguard sensitive data, it is important to implement mobile banking security features such as two-factor authentication and biometrics.
At Surf, our software experts developed a mobile banking app that enables clients to manage accounts, exchange currencies, create and share documents, generate invoices and payment orders, for instance, to counterparties or to the budget, and more. The product also allows for downloading account statements.
Tagline, the highest Russian award, featured the solution TOP 1 among mobile applications in the banking, finance, and insurance category. Founded in 2006, Tagline is the largest Russian analytical agency that researches digital production, interactive marketing, and related services markets to create up-to-date ratings of the best software and vendors.
If you are wondering how to build a banking application and how much it costs, read our article on the topic.
4. Machine learning (ML)
The use of machine learning (a category of artificial intelligence) is among the main digital banking technology trends for 2021 and beyond. Employing this cutting-edge technology, financial institutions can analyze user data to identify client needs. By addressing their issues, banks improve user engagement and increase revenue.
For instance, an organization can develop a software solution for collecting data such as transactional data, inquiry history, reviews. This data will be sent to the platform for further analysis. Using machine learning algorithms, it is possible to create a profile of each customer, calculate lifetime value, define satisfaction and retention rates.
With ML, financial institutions can achieve mobile banking security, protecting against threats like fraud, malware, viruses, and unauthorized access. Thanks to ML, companies can enable continuous system monitoring to instantly identify suspicious activities, prioritize risks, and block hacker attacks.
At the moment, AI is witnessing fast adoption in the banking sector. In its Global AI Survey report, McKinsey informs that around 60% of the survey participants say that their organizations have integrated at least one AI capability.
Experts found that 25% of the financial services industry employs machine learning to detect and prevent fraud, as well as support risk management and underwriting.
5. Blockchain technology
Blockchain is one of the key digital mobile banking trends of the future. Deloitte conducted a survey and revealed that 53% of C-level officers consider blockchain as an important part of their organizational infrastructure in 2020.
The number of blockchain transactions is also growing. Statista reports that the number of blockchain wallets reached 70 million in 2021, climbing from 10.98 million at the end of 2016.
Representing the decentralized distributed ledger, blockchain enables autonomous parties to carry out money transfers without the intervention of intermediaries.
As the technology is based on cryptography algorithms, it is much easier for financial organizations to ensure the security of sensitive data. Furthermore, blockchain provides advantages such as automated transactions and information authenticity.
6. Voice payments
Voice payments is another mobile banking technology trend of 2021 that you should know. With the widespread adoption of digital assistants like Siri and Alexa, the number of peer-to-peer transactions through voices is quickly increasing. In 2022, this figure is anticipated to reach 31%, growing from 8% in 2017, according to Statista.
By delivering this feature of a mobile banking app, financial institutions improve user experience and improve retention rates.
Considering practical examples, In Turkey, Garanti Bank has integrated a mobile assistant providing customers with the possibility to make payments using a simple command, like, “I need to transfer money to.” This smartphone solution can also report exchange rates, show the latest account activities, and analyze purchasing habits.
7. Cardless ATM withdrawal
Cardless ATM withdrawal is one of the primary mobile banking industry trends in 2021 and years to come. With innovations in NFC technology and QR code scanning, customers can interact with banking ATMs much easier.
For instance, people can access their funds and make payments by scanning their smartphone screens. Besides improved user experience, cardless ATM withdrawal can contribute to reduced cloned card fraud.
With the evolution of innovative technologies, the finance and banking sector is quickly transforming. By applying the latest mobile banking industry trends, companies can address various business-specific challenges.
For example, by employing machine learning, big data, and blockchain, an organization can safeguard sensitive data. Through in-depth analytics, it is possible to identify customer needs and preferences to meet them in the best way possible. Employing biometrics, you can protect against a variety of threats, including unauthorized access, skimming, and phishing.
By implementing features of a mobile banking app like voice payments and chatbots, you will be able to boost client satisfaction and employee productivity, as well as reduce expenses.
If you have some industry-specific issues and aim to resolve them using technologies, feel free to reach us via [email protected] or a contact form. Our team will get back to you soon and help address them.