Banking systems have developed over the years and has adopted technology to provide the banking services to their customers regularly and conveniently. While customers worldwide are switching to technology to make their processes more efficient, banking systems were not far behind. The shift from traditional banking methods to mobile banking, digital payments, artificial intelligence, and blockchain-based solutions, is proof that the banking sector is changing for their customers and the market’s fast-paced changing needs.
The growing demand for ecommerce and the need for contactless payment during Covid pandemic have served as a catalyst to the growth of technology in banking system. The ideas of AI transformation, blockchain, NFT, AR, and VR are becoming integral to the sector’s future. For instance, the Missed Call Banking is a service that allows customers to get information about their bank accounts by giving a missed call from their registered mobile number to the bank’s phone number. They can check their balance and get a mini statement without having to have human interactions. For example, a Punjab National bank customer can simply give a missed call on the PNB balance check number from their registered mobile number and they would receive their information instantly.
Digital Payment
A digital payment is when you use a digital device or channel to transfer funds from one account to another. Digital payment is an umbrella term that includes a lot under its wing like using bank transfers, QR codes, and it also involves payment methods like credit cards, debit cards, and prepaid cards.
For instance, when a person buys something online or from a local retailer and makes the payment via UPI, it is called a digital payment/transaction. The common ways of making UPI payments are:
- UPI (Unified Payments Interface)
- NEFT (National Electronic Fund Transfer)
- AEPS (Aadhar Enabled Payment System)
- mobile wallets
- PoS (Point of Sale) terminals.
Block-Chain solution
Blockchain is a system that keeps records in a way that does not have a main control and uses a shared document to store important information. This assure people that they can trust, track, and understand what is happening on the blockchain. With that, blockchain can help with many problems that have been around for a long time in banking industry.
Banks can use blockchain technology to keep a record of all transactions done worldwide. Banks can handle transactions quickly without the need for people or groups overseeing them. Blockchain technology makes it cheaper to exchange assets by eliminating middlemen and transferring ownership rights.
Mobile Banking
Mobile banking means accessing your bank account using a smartphone or tablet to check and control your bank accounts and do money-related operations. While most banks now have a Mobile banking app, they are easy and safe to use and easily reachable, even when you are not at a bank or ATM. We have earlier discussed Missed Call Banking, which implies all existing customers of the Bank of India can simply call BOI Balance Check number and get to know their account balance. Mobile banking also includes internet banking.
Internet banking is using the internet on your phone, tablet, or computer to avail information on your bank account. It is fast, usually does not cost anything, and lets you do things like paying bills and money transfer without going to or having to call your bank.
AI in Banking
AI has crept into all section of the current society and in Banking it plays a vital role too. Artificial Intelligence (AI) has been making big advancements in the banking sector of India, in term of predictions and decision making, it is bringing major changes to ensure the delivery of the best financial services to its customers.
For customers, AI is used in banking for chatbots and virtual assistants. These tools that use artificial intelligence can assist customers around the clock, answer their questions, and even suggest offers ideal just for them. This means that people do not have to interact with another human to get the help they need, and with better convenience and efficiency, the customers are happier too.
For the banks, an important use of AI is to predict, identify and prevent financial fraud. AI algorithms can quickly examine and understand innumerable transactions and locate patterns of actions that are dishonest or deceptive.
Block Chain is also used for:
- Fraud Detection
- KYC
- Trade Finance
- Cross border remittance
- Smart Contracts
Security in Banking Technology
With the shift to digital medium of banking the risk of Online frauds seem ever increasing. To control the misuse of digital platforms banks have adopted several security measures to curb out potential risks and cyber thefts. It is also known as Cyber security in banking.
Cyber security means using different tools and methods to protect networks, devices, and information from being attacked or damaged by things like viruses, hackers, or people who are not supposed to have access to the information.
The main goal of Cyber security in banking is to protect the user’s money, information, and assets. As more people stop using cash, they start doing more things or buying things online. People use their digital money, which is like debit cards and credit cards, for transactions that need to be protected and secured on the internet. The major types of Cyber threats in the financial system are:
- Phishing
- Malware
- Unencrypted Data
- Spoofing
- Data Manipulation
To fight these common forms of cyber threats, there are cyber security measures like:
- Anti-Virus/Anti Malware System
- Combined Security
- Multi-factor authentication
- Cyber insurance
- Consumer Awareness
Technological development in the banking sector is a promising scope for the financial markets in India to become more convenient and efficient while improving their customer interaction and relations. In recent years the need and demand for personalised services has seen a boom and the banking sector would be no exception. They must learn to provide open banking, customised service and not lose track of security while exploring the digital platforms. Banks need to be geared up for the storm of changes and make the most of the benefits that the storm of technology brings with it to exceed the expectations of customers and competition alike.