Any activities involved in accepting and safeguarding money owned by other individuals and entities and then lending out this money in order to earn a profit is called banking services. And therefore banking service is said to be an end-to-end process ensuring the overall implementation of a financial service. In simple, the banking industry is most concerned with direct saving and lending. Nowadays digital banking service is available on-demand which is operated within a set time-frame.
1.1 DIGITAL TRANSFORMATION
Digital transformation is the process of using digital technologies to meet changing business and market requirements by way of creating new or modify existing business processes, culture, and customer experiences. This outstanding of business in the digital age is digital transformation. The integration of digital technology into all parts of business leads to fundamental changes in business operations and delivers value to its customers. Thus, artificial intelligence is the power of digital transformation in organization along with digitalization and Big Data in Banking Digital Transformation. Therefore, those data allows you to understand customers in different way, to identify opportunities, optimize products and services, and automate solutions using those information.
1.2 Digital transformation driven change in banking
In the Era of digital world together with entering adulthood originate the smartphone, instant access to information and a smooth digital experience. While not one person enjoy filling paper forms, tiresome queuing or tramping to a distant bank branch is replaced by digital banking.
- Similarly, Generation Z are now entering adulthood, a failure to meet these new digital demands comes at the danger of legacy organisations.
Focusing on the experience of everyday tasks, checking your bank balance or counting up the bills for the month, make simpler the way of banking functions.
Banks with APIs enable fintech firms to build apps that utilize their infrastructure, like checking account balances) and open banking and supported by regulations such as the European Payment Services
2.1 FinTech affects bank
Fintech has brought unparalleled disruption in the financial services network. Earlier Fintech was procured in the form of back office functions in order to help banks manage customer databases, do other transactions and to manage accounts. Now, with Do-it-yourself modes where customers rely less on a brick and mortar bank for their banking needs, and gain digital channels at their disposal with 24/7 access. Therefore, digitization has fundamentally transformed banking.
Mobile payment revenue worldwide in 2015 was Dollar 450 billion. Payment apps combined with bank accounts permit unified mobile to mobile payments, online payments, investments and transfers.
2.2 Key Fintech Trends
- With omni channel banking enabling customers to use social, online, mobile channels which reduce customers visit to neighborhood branch.
- Automation with Machine Learning and Artificial Intelligence makes banks like UBS Group AG and Goldman Sachs have already put an AI/ML based solution in place. Thus they did tiresome back office work with other skilled machineries and also procured this intelligence process to calibrate services related to Finance.
- Faster authentication done with biometrics which reduce the frustration that comes with multiple passwords besides providing advanced validation techniques.
- Block chain make available transparency, minimizes risk, human errors and transactional fees. Thus, block chain said to be the perfect trading platform for securities exchanges.
Thus hereby, I conclude that Fintech is not only modifying business models and infrastructure of high-street banks, but it also generates extensive shifts in their human resources. New FinTech departments created in banks raise the demand for authorities with skills and expertise in both finance and development.