More and more Internet companies are offering financial services, putting pressure on banks. Financial institutions are also tormenting themselves with the needs of “digital banking natives” who want to transfer money via smartphone or tablet. Meanwhile, all banks are united by concerns about cyber security. Digitalization is bringing financial institutions a surprising transformation - into technology companies.
When Amazon appears on the scene, the alarm bells quickly ring: Book and electronics retailers have experienced it. The US giant is taking advantage of the opportunities offered by digitization, turning entire industries upside down. Recently, retailers have been frightened by Amazon's fresh food delivery service. Now it’s the banks. Since long customers may well apply for an Amazon credit card. The company is thinking about a current account offer. The website Business Insider Germany does not rule out that Amazon could become a kind of bank.
Greek video banking flagship project for the industry
The digital stress for financial service providers is constantly increasing Europe-wide. Customers are putting pressure on bank CIOs with Internet banking, mobile phones or tablet computers. Their demands are constantly increasing with mobility. People who travel a lot have little time. And especially those who have little time expect quick reactions and the best service from their bank: The bank should know its customer’s current life phase and needs and make tailor-made offers. In short: scoring a great customer experience. Innovative technologies should make this possible. The Greek Eurobank, for example, introduced a video banking system together with Cosmote. The dialogue with a financial advisor via video is unique in Greece and Europe.
Digitalization does not only challenge the business models of the financial world. The banking business operations are also ticking according to the logic of bits and bytes. Advanced robot technologies or artificial intelligence automate internal processes and make them more efficient. Technological change in the industry is therefore attracting start-ups. Tech companies recently presented their proposals for the financial institution of the future at a Deutsche Telekom customer event for European banks in Berlin.
IDnow and BehavioSec, two companies from the field of digital identities, were present in Berlin. CloudStorm offered a way out of the "Excel hell" via Robotic Process Automation (RPA). The Greek company softomotive also demonstrated the possibilities of RPA technology for banks. DataSine uses artificial intelligence (AI) to support companies in offering customers personalized content. Personetics also uses AI, so that banks can adapt to individual customers’ needs. The company WalkMe offers a kind of pilot service for the operation of applications - interesting for bank customers as well as employees.
Increasing cyber security concerns
As it also became clear in Berlin, the institutes are aware they will have to meet higher security requirements in the future. The fear is that banks' traditional security systems could no longer keep pace with the rapidly growing possibilities of attackers. According to experts, clever hackers could soon overcome around 80% of conventional security measures. The banks have to be better equipped with smart real-time systems in the future. Observers therefore predict a growing market for cyber-defense using AI.
The digital transformation in the banking sector is in full swing. Lloyd Blankfein, CEO of Goldman Sachs till recently, surprised with the statement that his bank is a technology company already. The industry has been eagerly discussing how banks can make the leap. The answer is simple: not alone. Not without cooperation and close partnerships. This is the mantra of the security industry. And a blueprint for the banks.