The exponential growth of technology is the paradigm that was described by Moore’s Law years ago and is characteristic of the present evolutionary process in technology. How fast this technology becomes reality is difficult to quantify, but a first discussion point may be the business context in which innovation will become preeminent. The banking industry is ripe for disruptive innovation, but it is a fact that there is a gap between the latest financial technology developments and the reality that banking customers are faced with.
Banks are the tree of knowledge in terms of transactional finances, as they facilitate and therefore witness our financial movements on a daily basis. Since the wave of online Personal Financial Management tools that were launched around 2006, this banking knowledge has been used to show customers their daily activities in a user-friendly way. Customer data drives success of digital banking and now it is almost impossible to imagine an online banking portal without features like saving goals, budgeting or categorised transactions.
From a technology point of view, it goes even further. Now the market has plenty of digital money management solutions, which are able to give us valued insights. Advanced analytics and machine learning formed the foundation, upon which personalized suggestion functions have completed these tools. Currently the number of implementations of these customer-based technologies is increasing, handled carefully by top Fintech companies.
Under the umbrella of all these innovative tools coming from the Fintech world, banks are forced to join the race too, and offer innovative products to their customers. People now expect a customer-centric approach, where banking success comes from helping clients to manage their money with digital tools.
The reality in implementations is that the market is still considering money management tools as separate activities from online banking. It is difficult to find these digital solutions fully integrated in one online banking offering. Downstream implementations are more common, and to get valuable financial information, the customer is forced either to go to specific tabs inside the online banking portal or to download specific mobile applications.
It is quite incredible that we can now view a whole pool of information at the touch of a few buttons, which typically includes categorised transactions, financial calendars income and expenses analyses, cash flow forecasts, predictive cash flow movements, and peer comparison.
But this is the key point – all this information is just in front of you.
