It was only a short time ago that we used to visit bank branches, use checkbooks, draw cash, chat with the manager and review our spending on printed sheets.
Then came the ATM, then the personal computer, then online banking and now most of the population segments are operating this, principally through their smart-phones. 70% of the population of the USA has smartphones and that number is rising.
Today, most banking transactions are done on smartphones which have also all but replaced a plethora of other gadgets we used to own for other purposes, music players, cameras, game consoles, fitness trackers etc.
The smartphone has its limitations. You can drop it. You can lose it. It is not exactly hygienic and, for the hard of hearing or the short-sighted, sometimes more than a nuisance.
So we are all waiting eagerly for the next generation of smartphones which will, hopefully, avoid the limitations of the current ones although the emphasis seems to be upon being able to use 5G and download movies in 5 seconds rather than something that will totally free up one´s hands –and cannot be dropped.
There are many who agree that the “next big thing” will merely add on more functionality, more memory, greater speed than existing devices. The next-generation smartphone, hopefully un-droppable, will connect all parts, or most parts of a person´s life, health, diet, social media interactions, banking, travel, activities, shopping, entertainment, and information.
The somewhat controversial voice devices like Amazon Echo and Google Home may be early indications of the capabilities of the next generation whilst wearable devices like the Apple Watch indicate a certain potential for solving the droppable problem, among others. It’s hard to clearly imagine exactly what is coming next, just like the original Nokia did not presage the combination of so many features and functions within today’s smartphone.
It is fairly certain that some version of today’s smartphone will continue to be the device for the future of banking, since it has become so commonplace and such an integral part of everyone’s life.
In this digital era, smartphones and social media have become the major channels for marketing and increasingly, the major sources of purchasing. Artificial intelligence is reshaping marketing into a hyper-competitive market place, improving targeting, personalization and access AI, together with big data and machine learning, can manage the traditional customer data found in bank records and collate it both structured and unstructured data from outside the organization, for the purpose of putting the bank or financial institution in touch with customer needs in real time based on his activities, preferences and behavior.
This powerful trio, AI, big data and machine learning are able to predict customer behavior using algorithms that can work out the customer’s likelihood of making a particular purchase or, in the case of a bank, remaining a loyal client. Who will run the AI in banking? Probably all FIs in the near future. It will take a lot of the drudgery out of data management and free up marketing teams to be more creative and inventive of new products. If it all sounds rather intrusive, it is, up to a point and the dichotomy is that mobile phone users consider their phones to be their personal space, an extension of themselves.
Therefore any excursion into that space has to be relevant and timely. That is the conundrum that banking institutions have to solve when they employ next-generation technologies.
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