The Basics of Tech Banking

Published on : 04-18-2023

Paul Inouye described that technological evolution is changing almost every section of the economy, and it's not stopping at investment banks. Several sectors including private equity, media, telecom and others have also ventured into technology to streamline their processes and increase productivity.

Fintech startups have disrupted the financial sector and posed a threat to established players. These firms can offer customers a wide range of services, such as marketplace lending, virtual currency exchanges and digital wallets. They can also partner with banks to hold deposits, buy loans or clear and settle the financial transactions they generate.

As these upstarts gain market share and become more powerful, regulators are concerned about market concentration. To mitigate this risk, authorities have imposed specific requirements for fintechs to operate as licensed banks.

The emergence of these upstarts has made it harder for traditional banks to provide their customers with the full range of services that they need, but it has also created new opportunities for them to improve their offerings and better meet customer expectations.

Banks are experimenting with technologies to enable them to offer their customers more digitally focused, personalised services. These services may be delivered by software that connects to a bank's own online platforms or by an app that is a standalone product and enables customers to access their accounts from anywhere, at any time.

Moreover, they have started to use AI and machine learning to better understand their customers' needs and tailor their offerings accordingly. Examples of these include Capital One's intelligent assistant Eno, which allows customers to communicate with it using text messages, get fraud alerts and pay bills from their mobile phone.

These types of new technology have helped them attract a growing number of consumers who demand high-quality and convenient services. They are also helping to bring a fresh perspective to traditional banking by offering a digital-first approach that reflects their consumers' expectations and provides cleaner and more efficient service.

It is also important to make sure that IT staff members have the necessary training and know-how to implement these technologies. The right IT people are crucial in delivering high-quality services to customers and keeping up with evolving regulatory regulations.