How technology has changed banking over the years

 

E-banking, online banking, net banking, etc. have completely changed the way banking is done today.

When was the last time you actually walked to your bank physically and spoke to the teller? Several days ago or perhaps weeks right? Technology has had a very big effect on almost every area of our lives. From the way we work to how we associate with others or how we entertain ourselves, technology has altered almost everything.

Ever since the 18th century, the banking sector has been evolving, and it is known as one of the oldest businesses in the world. It has progressed and grown with every passing year. Although in recent years, the industry has transformed with the help of technology. Banks were always regarded as a place with long queues, and an unmanageable amount of paperwork. Due to technological advancements in the banking sector, the need for labor and papers has reduced a lot.

The banking sector hasn't been left out either; the impact has been profound and has affected every part of banking from the way banks operate through to how clients access different banking services. Gone are the days of standing in endless lines to deposit or cash a check. Information is also now transferred and stored in a much more convenient and efficient way.

No more standing in queues

If you are over 30, you've probably spent hours in interminable bank queues over lunchtimes or on a Saturday morning, to withdraw money or pay in a cheque. Banks have leaped on the opportunities offered by online - and now mobile - banking. It's possible to do everything online, from simple transactions to complicated issues such as applying for a mortgage. A new study by YouGov reveals that one in three retail banking customers feel their bank’s mobile app isn’t as good as their online banking provision, however. This, coupled with the fact that more people are relying on their phones to access their banking, is sure to be a focus for high street banks in the coming years. Some banks are now only available virtually - banks like Smile in the UK and Simple in the US don’t have any physical branches at all

One tap and you’re done

Although Mobil first issued contactless cards for customers to use at their petrol stations in the US as early as 1997, the very first contactless cards associated with banks were given out by Barclaycard in 2008. Now there are well over 32 million in circulation in the UK. By 2011, mobile technology had merged with contactless, and the first wave of apps that allowed their owners to pay by tapping the phone against the terminal was born. Google Wallet is now one of the most popular in the world, allowing users to store debit, credit, loyalty gifts, and store cards on their phones. A few years ago London buses opened their doors to contactless technology - you can now pay your fare with a quick tap of your card as you step onto the bus.

Cyber-security and data protection

In the first half of 2015, 400 data breaches took place in the US, according to the US-based Identity Theft Resource Center, with 117,576,693 personal records put at risk. 10% of these breaches were in the banking sector - and that is an 85% jump from the same period in the previous year. Keeping financial information safe is one of the biggest areas of investment for banks, and it is also a responsibility for customers. Easy passwords, public computers, and “phishing” scams are some of the most common ways we are separated from our money.

A different sort of customer service

2015’s World Retail Banking Report spelled out some bad news for high street banks: Positive customer experiences had fallen for the second year in a row. Younger, Generation-Y, bank customers are less likely than their parents to show loyalty to one particular bank. Customers are generally less willing to take their bank’s word for which secondary products such as mortgages and investments they should take, preferring to do the research themselves. Online banking and mobile banking mean that generic customer services are no longer needed. Customers expect a more tailored and personalized experience when they - on rare occasions - need to contact their bank by phone or by chat, or even in person at a branch.

The Internal Hierarchy in financial institutions has shifted

The amount of soft data held by banks has increased tremendously over the past few years, meaning that data mining is now an integral part of a bank's operations. This typically means that Information Technology experts are now just as essential as finance experts are to financial institutions. This is especially true as more banks embrace cloud computing. They need IT experts to manage data and keep up with the trends.

The very own Bottom Line

Even though this move towards cloud computing looks set to continue, the biggest revolution could still be yet to come as some financial experts feel the sector hasn't reached its peak yet. Should this be the case then the next 5 or so years could turn out to be as exciting as the past 10 years, as technology continues to structure the way the banking sector operates. It will also be interesting to see which financial institutions will be flexible enough to keep up with the revolution pace.