Growth of Online Banking Market Estimated to Record Highest CAGR By 2027 | COR Financial Solutions Limited, EdgeVerve Systems Limited, Fiserv
The utilization of online banking has reached unprecedented levels across the globe. As compared to the last decade, the banking sector has undergone a massive transformation, and the digitization continues to accelerate. Advancements in technology have made it easier and more convenient for customers to carry out transaction through their smartphones, laptops, or PCs than visiting the branch each time they want to conduct any transaction. For banking institutions, there is no other way to sustain in the business than providing online banking services that are fast, secure, and convenient. Banks have adopted the approach of innovation and been striving to provide better services than before.
Major Key Players:
ACI Worldwide, Inc., Capital Banking Solution, CGI Inc., COR Financial Solutions Limited, EdgeVerve Systems Limited, Fiserv, Inc., Microsoft, Oracle, Tata Consultancy Services Limited, and Temenos Headquarters SA
Increase in investments in advanced technological solutions such as card-free transaction, chatbots, and cloud computing would lead to providing better services than before and attract new customers. Privacy, security, and seamless service remain at the core of new solutions for online banking and different services have been introduced. Implementation of artificial intelligence (AI) has played a crucial part in offering personalization, around the clock service, and security and is expected to rise in the coming year. With digital literacy on the rise, the adoption of online banking services is gaining momentum across the world.
“According to the report published by Allied Market Research, the global online banking market is expected to reach $31.81 billion by 2027.”
Following are some of the trends to be watched out for in 2021.
1. Card-Free Transactions
With ATM machines installed at different locations, people need to carry their debit or credit cards to dispense cash. However, this is becoming a thing of the last decade. With many fraudulent activities taking place related to debit and credit cards, banks have been finding different ways to ensure security. Banks have begun offering card-free facilities to their customers. Using a mobile banking app of the bank, customers can scan the QR code displayed on ATM machines and dispense required amount of cash. Thorough procedures have been launched by banks.
In addition to scanning QR code, there are different steps that involve using MPIN, registered mobile number, and others. A lot of banks such as State Bank of India, ICICI Bank, and RBL Bank have already rolled out their cardless and contactless banking facilities. Though this facility has not yet implemented on the large scale, sooner or later, it will become prominent among all the banks as they started investing heavily.
2. Biometric Identification
Passwords and pins are expected to become the old ways to conduct secure transactions in the banking sector. A lot of concerns such as forgetting pins or passwords, time required to set up new ones, and possibility of leakage have been arising and security can be compromised. This can lead to frauds and a loss of substantial amount of money. One of the best ways to implement secure banking is to introduce biometric identification.
From smartphone apps of the bank to ATM transactions, fingerprint, eye, or facial scanning can provide the most secure way to transact and authenticate. Banks have begun integrating biometric authentication facilities in smartphone apps, through which, users can log in and carry out their transactions. This offers an extra layer of security for users as their smartphones and laptops can get stolen. Citi Bank, The Royal Bank of Scotland, Wells Fargo, and NatWest are some of the leading banks that offer different authentication facilities for carrying out safe online banking transactions.
3. Usage of AI
The banking sector has been reaping benefits of artificial intelligence (AI) technology to offer personalized and secure experience. From personalization perspective, banks can offer recommendations about facilities such as loans or investments a customer might be interested in availing. Customers have stopped using mobile banking apps and websites that do not know their preferences, offer customized functionalities, and reward them.
Utilizing data and analytics for suggesting or determining the possible actions of customers is a need of an hour. In addition, using AI algorithms, banks can caution customers about potential fraud activities and save their money. These algorithms can also find out the pattern in which a customer is using banking services and notify them if any unusual activity is found. It will become the first medium to caution the customer.
4. Chatbots at Disposal
The implementation of AI is not limited to personalized experience and security. Solving grievances and queries of clients is an essential part of the service. The traditional way of visiting banks or talking to customer service representatives will fall back as banks have begun implementing chatbots on their websites and smartphone apps. With thorough functionality and each aspect of the banking installed in the chatbots, these virtual service providers play a crucial part in faster and seamless solving of queries.
Machine learning algorithms would offer around the clock service to customers along with full attention to their concerns. Banks have begun investing in chatbots as it reduces their manpower and eliminates the need of clients to stand in queue to get their concerns addressed. Almost every bank that offers online banking service has a chatbot at the corner of their websites or smartphone application, popping its head up and asking if it can be of any help.
5. Cloud Computing
With a significant amount of data generated and rise in need to process, analyze, and gain insights from the data, the implementation of cloud infrastructure is expected to increase. Increase in investments in scalability and banking-specific capabilities have led to utilizing cloud computing. High initial investments required for physical servers have been eliminated and tech giants have been joining hands to offer state-of-the-art infrastructure and rapid adoption of the cloud.
In addition, the latest cloud computing solutions have been eliminating issues such as privacy, compliance, and security. The uncertainties and disruptions in the banking sector during the pandemic led to adoption of online banking services more than before. So, cloud computing helps in management of huge amount of data and offering valuable insights to adapt during the uncertain times. The movement toward cloud computing is estimated to increase in 2021.
