The digital landscape is constantly evolving, and new technologies in the banking sector are playing a critical role in delivering effective services to customers.
To stay competitive, banks must explore new technology in the banking sector in 2024 and use it to improve customer experience, optimize operations, and drive growth.
Statista projects global enterprise IT spending in the banking and securities sector to reach $715 billion by 2025, fueling the importance of technology investments.
This underscores the need for banking IT analysts, managers, VPs, and CIOs to understand emerging technologies.
In this article, we'll explore the top 10 new technologies as well as some recent trends in the banking sector to help you decide which should you invest in. But, before that let’s first see why the use of the latest technology in banks is important.
Table of Contents
Importance of New Technologies in the Banking Industry
In today’s digital world, where the IT sector is constantly changing, companies in the banking sector must be up to date with the latest trends and tools available for the improvement and efficiency of processes to achieve greater profitability.
Here are some of the key benefits of implementing recent technologies for banks is important:
Increased User experience
Advanced technologies such as artificial intelligence have allowed bank institutions to enhance the user experience comprehensively.
With analytical IT solutions, banks can gain knowledge of their customer's preferences, purchasing behavior, and financial health and can offer products and services tailored to their users.
Increased Number of Clients
In traditional banking, banks faced a loss of confidence; however, with the new technology in hand, growth in the use of baking apps, and online banking by consumers, financial institutions have recently increased the number of customers.
Moreover, with the introduction of Fintech in the sector, it is clear that banks will have to change the way they conduct their business to avoid losing customers.
Interesting Read: Top 20 Fintech Startup Ideas to Consider in 2024
Greater efficiency in Banking Processes
With the use of different cutting-edge baking technologies, such as electronic signatures or banking app development for smartphones, banks have improved the efficiency of their manual processes.
The technologies have helped banks reduce human errors in dealings with customers. It's estimated that correcting this type of error is generally between three and four times more expensive than creating a digital process.
Since all the data is collected and recorded correctly, digital solutions play a crucial role when it comes to improving the efficiency of banking operations
Reduced Cost
Another big advantage of using a new technology in the banking sector in India is cost savings, both for institutions and their customers.
With automation, improved efficiency, optimized resource allocation, and proactive risk management, the technologies help in cost reduction.
These savings ultimately translate into benefits for both banks and customers through better services, more competitive rates, and a smoother banking experience.
Data-driven Decision Making
With the increasing digitalization of banks, data becomes one of the most important assets when making dynamic decisions.
Technologies such as Data Analytics and Big Data allow bank institutions to make decisions and improve processes on the data available to their customers.
10 Latest Technologies in the Banking Sector
Now that we know how recent technologies in banking play a crucial role, it’s time we dig deeper and find out which is the new technology in the banking realm.
The bank industry is undergoing a significant transformation driven by advanced solutions such as UPI payment applications and mobile wallets.
Automation, digitalization, and data-driven insights have become the main focus for banks looking to enhance customer experiences, streamline operations, and gain a competitive advantage.
That being said, here’s an overview of the recent technologies used in banking industry.
1. Digital Banking
The emergence of digital banking has changed how customers interact with their banks.
Mobile banking applications, online web portals, and self-service options have become the norm, offering customers convenience and real-time access to their accounts.
Mobile wallets such as Google Pay, PayPal, and Apple Pay are shaping digital transactions and redefining how users handle their finances.
With these wallets, users can make contactless payments for everyday services directly from their phones without carrying cash or credit/debit cards.
Also Read: How to Create a Payment Gateway in 2024? Benefits, Cost, Process & Challenges
2. Artificial Intelligence (AI) and Machine Learning (ML)
Bank institutions are increasingly implementing AI Development Services (AI) and machine learning (ML) to enhance operational efficiency, detect fraud, and improve customer experiences.
AI-powered chatbots and virtual assistants are beings used to offer personalized assistance and support to customers.
On the other hand, ML algorithms examine large datasets to find valuable insights for risk assessment and customer segmentation. These insights then help banking professionals make data-driven decisions.
3. Robotic Process Automation (RPA)
This new technology in the banking sector has gained traction, automating repetitive manual tasks and improving operational efficiency.
By using modern banking system robots, banks can streamline various processes such as customer onboarding, data entry, and compliance checks, reducing errors and enhancing productivity.
4. Cloud Computing
By allowing banks to optimize infrastructure costs, improve scalability, and quickly deploy applications, cloud based application development has confirmed its spot as one of the top emerging technologies in the baking industry.
Cloud-based solutions offer improved data security measures, agility, and the ability to integrate with other systems, allowing banks to innovate and launch new services swiftly.
Related Read: Top 7 Cloud Development Platforms to Consider for Your Project in 2024
5. Blockchain Technology
Blockchain is one of the most disruptive technologies in the banking industry, transforming areas such as cross-border payments, trading crypto in the futures market, and identity verification.
The decentralized and secure nature of blockchain technology has made transactions safe and transparent, eliminated intermediaries, and improved the accuracy of financial data.
Due to these reasons, this technology is expected to grow exponentially in the future and play an even bigger role in the banking sector.
6. Hyper Automation
Hyper Automation merges robotic process automation (RPA) with AI and ML capabilities to automate complex business processes end-to-end.
Banks can leverage hyper-automation to automate repetitive tasks, such as data entry, document processing, and customer onboarding.
By automating these processes, banks can improve operational efficiency, reduce errors, and free up employees to focus on higher-value activities.
7. Data Analytics and Big Data
With technologies data analytics and big data, banks can have access to a wealth of data, including customer information, transaction history, market trends, and economic indicators.
This data can provide valuable insights that can help banking professionals to make various aspects of decisions.
Additionally, by using big data analytics, banks can analyze customer behavior, identify patterns, and understand trends in real-time.
This can then allow them to craft their products and services according to the ever-changing demands of their customers.
For instance, by analyzing customer purchase history, a bank can offer personalized recommendations for financial such as loans, credit cards, or investment opportunities.
8. Cybersecurity and Fraud Prevention
With the recent developments in banking and digitization of banking services, cybersecurity, and fraud prevention have become critical priorities.
Banks are implementing various types of cybersecurity technologies such as threat intelligence, SOAR solutions, encryption, and biometric authentication to prevent cyber threats and safeguard institution and customer data.
9. Internet of Things (IoT)
When it comes to innovation in the banking sector, the Internet of Things (IoT) is one of the evident technologies. The technology allows the interconnection of physical and objects, allowing them to collect and exchange data.
In the banking industry, IoT can be used for various applications such as remote asset monitoring, real-time fraud detection, and personalized customer experiences.
For example, institutions can use IoT devices to monitor ATMs, track inventory levels, and provide personalized offers based on customers’ preferences and locations.
10. DevOps
Another new technology in the banking sector in India is DevOps which combines software development and IT operations to allow continuous integration, continuous delivery, and faster application deployment.
By implementing DevOps practices, banks can reduce time to market for new services, improve collaboration between development and operations teams, and enhance their application's overall quality and stability.
DevOps automation tools further accelerate the development and deployment processes, allowing banks to achieve more in less time.
In short, digital banking, AI, ML, RPA, cloud computing, blockchain, big data, cybersecurity, IoT, and DevOps are some of the new technologies in the banking sector that are helping banks increase efficiency, reduce costs, enhance security, make data-driven decisions and offer more personalized services to their customers.
Recommended Read: What is Deep Tech and How it’s Transforming Different Industries
The Recent Trends in the Banking Sector
Aside from the above-mentioned technologies, several other emerging trends in banking are reshaping the sector. These trends include:
Generative AI
One of the latest trends in banking is the use of generative AI. GenAI allows banks to analyze vast amounts of data and generate smart and contextually relevant responses, recommendations, and financial insights.
With this ability to analyze user preferences, behavior, and historical data and create personalized recommendations, content, and experiences, generative AI holds the potential to change customer interactions, product innovation, and risk management in the banking sector.
Also Read: What is the Role of Generative AI in Drug Discovery? 2024
RegTech
When talking about trends and new technology in the banking industry, Regulatory technology (RegTech) is a relatively new term that’s gaining attention.
RegTech refers to the use of technology to streamline regulatory compliance processes in the fintech industry.
Bank institutions face numerous regulatory challenges, and RegTech solutions help automate compliance, monitoring, reporting, and risk management.
These technology solutions for banks use AI, machine learning, and data analytics to ensure adherence to regulations, reduce compliance costs, and minimize the risk of regulatory violations.
Open Banking
Open banking initiatives focus on increasing competition and innovation in the banking industry by enabling customers to share their financial data with authorized third-party providers securely.
Banks with open APIs (Application Programming Interfaces) can collaborate with fintech companies and other financial institutions to develop new products and services that meet customer needs.
Open banking promotes data sharing, allows personalized financial solutions, and enhances the overall customer experience.
Related Read: A Complete Guide API Development: Types, Working, Tools, Terminology, and Best Practices
Biometric Authentication
Biometric authentication solutions such as fingerprint recognition, facial recognition, and voice recognition are gaining popularity in the baking sector.
These systems increase security and convenience by using unique biological characteristics for user identification and authentication.
The biometric technologies can be used as an identity verification solution for secure access to banking applications, transaction verification, and identification verification during customer onboarding processes.
Payment Processing
With the increasing number of digital payment options and the evolving needs of customers, payment processing technologies are also rapidly advancing.
Banks are considering faster and more secure payment methods like contactless payments, mobile wallets, and real-time payment solutions.
These solutions offer convenience, speed, and improved transaction security, allowing customers to make payments seamlessly across various channels and devices.
Autonomic Systems
Automic systems refer to a machine, a device, or software that can operate with minimal or no human control, that is, it can operate independently.
It means they can self-diagnose and self-correct, optimizing processes and reducing downtime, leading to cost savings and increased productivity.
By leveraging this trend in the banking industry, banks can improve operational efficiency, reduce human error, and enhance customer experiences.
Privacy Enhancing Computation
PEC technologies enable banks to perform computations on sensitive data while maintaining privacy.
With a focus on data privacy and protection, banking technology allows for secure data sharing and collaboration while ensuring confidentiality.
Financial institutions can confidently analyze and derive insights from customer data without compromising individual privacy by using cryptographic protocols and techniques like secure multi-party computation, differential privacy, and homomorphic encryption.
Conclusion
The banking sector is going through a rapid transformation driven by constant technological innovation, changing customer expectations, and evolving regulatory requirements.
Latest technologies, such as AI, Big Data, and Blockchain, are especially poised to reshape various aspects of banking, from customer experience to risk management.
Additionally, technologies such as cloud computing, DevOps, IoT, and robust cybersecurity measures will improve banks' operations and customer service, positioning them for long-term success.
Once you know what the new technology in the banking sector is, the second most important thing is actually to build banking solutions leveraging these technologies.
However, successful implementation requires expertise and resources that may not be readily available within most banks.
That’s why it’s always a good idea to get in touch with a reputable software and app development company that will guide you through the process of selecting, building, and launching smart solutions.
So, if you need any such provider, contact Arramton Infotech.
Frequently Asked Questions
Q. What is the new technology in banking in 2024?
Ans. Generative AI, biometric logins, cloud computing, and open banking are new technologies in banking in 2024.
Q. What is the future of banking?
Ans. The future of banking is expected to be a frictionless experience with AI-powered assistants, seamless security through biometrics, and data-driven insights for smarter financial decisions.
Q. How is AI used in banking?
Ans. AI can be used in banking to tackle tasks like fraud detection, automate processes, and personalize financial products based on your data.
Q. What are the trends for the banking industry in 2030?
Ans. In 2030, we might see a shift towards invisible banking embedded into everyday life. Cybersecurity will remain a top priority along with a focus on financial inclusion using tech to reach everyone.
Q. What are the new technologies of the banking system in India?
Ans. The new technologies of the banking system in India include Aadhaar-based authentication, the rise of neobanks, and the growth of fintech startups offering unique financial solutions.
Q. What are modern banking tools?
Ans. Modern banking tools leverage technology for convenience. These include mobile apps for banking on the go, contactless payments, and online platforms for account management and investment.
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