Mudra Compass

The year 2022 was not so momentous but a rollercoaster ride for the Indian Banking Industry due to RBI’s unprecedented aggression on inflation, the arrest of a top banker in a loan scam, and continuing collapse of India’s cooperative banks. 

2023 will be a challenging year in many ways for financial institutions such as innovative new edge technologies, how they deal with customers, the reformation of service offerings, and how they apply new sources of data across departments. These all are reshaping the banking industry.

The evolution is a constant part of the banking industry which will continue in 2023.

Cloud-based support system

This cloud-based support system helps the banking system to increase its agility and accountability, thus cost-effective IT and operational expenses play an important part when it comes to remote work to ensure effective working.

For example, in 2020, HSBC signed a long-term deal with Amazon Web Services to move their existing legacy functions over to new cloud-based alternatives. And then there’s Deutsche Bank, which partnered with Google to deliver a cloud-native “fully-managed environment for applications”. 

Remote working will be a future trend. In one survey, it was noticed that 90% of employees are happier with the work-from-home option. With the effective use of cloud-based systems, employees can access crucial financial data at any time and at any place.

Increase the use of AI

With the increase in technology, Artificial Intelligence is one of the most talked about technologies in the banking industry. The use of AI will increase in the coming year as banks are looking for cost-effective functionality and improved efficiency. Banks are already using AI for a variety of tasks, including fraud detection, customer service, and mortgage approvals.

Customer service and fraud detection are the best examples of integrating AI in banking. Thus, banks can free us employees to work on more crucial tasks.

Banks are looking to provide the best customer experience, using AI to personalized customer experience, banks want to ensure high engagement and retention of customers. This involves providing recommendations on products or services that may be of interest to the customer.

Integrating AI can help banks to improve risk management by analyzing data, and banks can identify risks more quickly and take steps to mitigate them.

Cyber security

When it comes to safety, especially in banking, cyber security will be crucial and cyber security attacks have a wide-ranging impact on organizations. For banks, preventing customers’ data is of utmost importance, whereas for hackers, customers’ data and personally identifiable information (PII) is incredibly valuable.

Negligence in security may result in the bank losing a huge quantity of customers as well as revenue. So, prioritizing cyber security in 2023 is essential. Additionally, they have to optimize their internal processes, but they must be selective while choosing third parties that put data security at the top.

Open banking

The number of open banking users is growing significantly across the globe. So, the concept of opening banking will be in huge demand because of its benefits to customers and banks.

Furthermore, before granting third parties access to customers’ data, banks must understand how consumers behave, what they want, and most importantly, what they need. That enables banks to improve customer experience which results in higher retention and engagement.

Support digital payment

Digitalization is on its top and the same goes with digital payments. To ensure the best digital payment experience, most banks and financial institutions are constantly improving in terms of technologically equipped systems and infrastructure for net banking and mobile banking.

Currently, more transactions are happening online via cards, mobile, and even smart watches, banks are ensuring a secured payment system by including two-factor authentication and fraud monitoring.

Banks are ensuring up-to-date and user-friendly payment systems to ensure seamless checkouts while paying online or in-app.

Banks are ensuring seamless and hassle-free currency conversion and low fees for customers who send or receive money internationally.

Focus on big data

Banks want to put their customers’ behavior at the very center of their business models. Hence, they are providing more personalized services and increasing their sales by making the most out of predictive analytics. By analyzing their big data, banks can focus on their customers’ needs, providing them with contextually relevant information about discounts or persona.

The Bottom Line

The banking industry is always evolving so no financial institutions want to miss any growth moment. Banks are working on incorporating these trends by redesigning their online banking portals and mobile apps to enhance the customer experience.