Current digital banking trends in the US

Due to the pandemic, most industries across the globe have been forced to adapt and transform ways of doing business. Digitization has arguably been the most important tool for this, due to social distancing practices. Now, online and mobile-friendly banking services and solutions have become essential. But this has not been a new development. According to Statista, more than half of adult Americans access their financial services via laptops and PCs. To utilise the benefits of digitization, customers need to be informed and educated of the digital banking trends affecting the banking industry.

Using data to achieve personalization

Seeing that customer expectations constantly rise, the key to successful personalization is customer satisfaction. According to figures produced by Deloitte, Evergage, and BCG, have given marketers the realization that businesses who do not offer personalization will lose revenue and loyalty. For businesses to thrive, they need a supportive client base. By showing clients that the business cares about them, they would be able to achieve this.

Banks can use artificial intelligence (AI) and machine learning (ML) to create a more personalized experience for consumers. By using AI, banks access and use the available consumer data to create personalized experiences based on a consumer's behavior and habits. ML, being a branch of AI which is more specific, is a form of technology which serves to process data and learn on its own without needing the assistance and supervision of humans. If this is successful, ML will be able to automate and improve on services offered. ML will use pre-programmed algorithms to analyze files which are accessible via the cloud. To summarise, the use of AI and ML will assist banks in understanding the needs of their customers faster in real time, identifying and providing data-backed solutions for problems, performing faster analyses to ensure efficiency and productivity, as well as developing key strategies.

Cloud Computing

Cloud computing is a tool where computing services, such as software, data warehouses, and networking tools, are available for use on the internet. Seeing that having to choose between using a public cloud, private cloud or data centers becomes restrictive, the use of connected clouds will meet the needs of companies. This tool will allow companies to host their data and applications in the cloud. Cloud computing offers banks a range of benefits, such as:

• Cost efficiency
• Global scalability
• Increased productivity
• Speed
• Adequate security
• Reliability
• Convenience

Additionally, cloud computing is also able to assist banks in eliminating large data silos. By storing data online, banks are able to minimise the risk of losing data due physical disaster. The need for physical servers, systems, and people to manage them reduces, which will save time and money.

Security and Privacy

Theft is a common occurrence in the banking industry. Due to newer digital banking products and services, customers have even higher chances of losing money seeing that the new products and services may have unknown flaws. Because of this cybersecurity has become a major customer demand for any digital bank. According to a survey by CSIweb, 58% of people will stop using a financial institution's services if they have faced a privacy breach, while 28% said that their bank accounts have been exposed to a cyber attack at least once before. 73% of the participants were concerned about identity theft, 72% were concerned about bank card information being stolen, 55% were concerned about the threat of malicious malware, and 50% were concerned by a possible data breach in their bank.

For banks to avoid these concerns, and ensure security and privacy, banks need to implement a few tools. Firstly, banks would need to invest in security systems to avoid the risks of cyberattacks. Secondly, banks would have to perform security audits of a bank's system to identify any weaknesses and flaws. Thirdly, banks would have to protect their customers from phishing. Finally, banks would need to educate their customers about cybersecurity and safeguarding themselves.

IoT

Seeing that many consumers are willing to share extra personal information to save money, the IoT (internet of things) is able to automate a large amount of that data sharing. IoT is the interconnection between devices, such as smartphones, smart watches, computers. Banks would then be able to use the data from IoT devices to mitigate risk and possibly prevent losses, such as alerting customers when their account has been accessed by an unfamiliar device or being able to monitor activity.

The takeaway

With ever-changing technology and the effects of the pandemic, banks have had to transform themselves to take advantage of technology. The major digital banking trends were mentioned, and these will be used to gain a competitive edge over other banks who have not incorporated them. For businesses interested in digital finance trends, they should consider incorporating small business accounting software. Business accounting software assists businesses in performing a range of tasks, such as tracking inventory, reconciling credit card and bank activity, accounting for taxes, and utilizing double-entry accounting standards. For more information on this, business owners should consult The Really Useful Information Company (TRUiC) who is able to assist in finding services which offer this.