The Future of Banking with the Growth of Technology

Call centre trends for 2021

Like businesses everywhere, banks need to continue embracing emerging technologies while adapting and evolving business models to put customers at the forefront of their strategies. From online check deposits to money transfers and everything in between, banks must keep up with the times to keep their customers happy and loyal to their brand. After all, banking years from now will look different than it does today.

Banks will continuously face changing consumer expectations, innovative technologies, and new business models, resulting in better strategies to prepare for banking in ten years. Here's what the future of banking holds as technology continues to evolve.

What is Fintech?

FinTech, a combination of the words “financial” and “technology,” is a relatively new and often nebulous term that applies to any emerging technology that helps consumers or financial institutions deliver financial services in more unique, faster ways than was traditionally available. Think of the difference between walking into a bank to request your balance and the ability to pull up that information in real-time on your phone, and you’ll have a good idea of FinTech’s impact. Financial technology consists of:

  • Blockchain
  • Payment
  • Exchange
  • Research
  • Digital Money
  • Online Banking
  • Investment
  • Crowdfunding

Banks vs. FinTech

FinTech (financial technology) uses technology like artificial intelligence and mobile app development and innovation to compete with traditional banking methods when it comes to providing financial services like checking accounts. FinTech companies are continuing to take market share from traditional banks and financial service providers.

Examples of FinTech include:

  • Tax software
  • Digital payments between people
  • Online stock investments

Four pillars of the digital-first bank

Smart digital platforms power these superior experiences, and this digital-first model has changed the game forever. There has been a fundamental shift in how business gets done, where staying relevant means becoming an active part of a customer’s digital life.

To survive when giants like Google make their way into people’s financial lives, banks must have the proper framework in place to compete. This framework is the digital-first platform, supported by four pillars – omnichannel banking, innovative banking, modular banking and open banking. Each of these four pillars is fundamental to success in the banking industry of the future.

  1. Omni-channel banking
  2. With siloed channels (like web, online or branches), the traditional approach is neither customer-friendly, staff friendly, nor efficient. Each channel needs its raft of workflows, content, screen design and other supports, meaning the same functionality is created repeatedly. Work is redone many times, with the result distributed to channels that don’t relate to each other. Rather than creating digital business functions for each channel, it makes sense to do everything once and disperse to all channels via a central hub. What’s needed is a major omnichannel digital banking platform to orchestrate customer interactions across any touchpoint.

  3. Modular banking
  4. The Ubers and Facebooks of this world frequently introduce clever new features quickly and at almost zero at marginal cost. They are agile enough to exceed customer expectations without any major implementations, upheaval or cost implications. They easily roll out new offerings and scale them up or down – at will. With a modular architecture in place, banks can innovate in the same way – fast and in line with customer needs. A modular architecture empowers a bank to go beyond responding to market realities to actively creating them – in conjunction with the customer.

  5. Open banking
  6. The threat of disintermediation has been an issue for banks since PSD2, and open banking showed up on their radar. Opening up their APIs gives other parties, including competitors, unprecedented access to a bank’s data. Customer demands have changed, however, so failing to take on open banking correctly will lead to disintermediation anyway. Whether by business model choice or by regulation, banks have to engage. Banks must open up their APIs – but they can also benefit by becoming consumers, tapping into third party capabilities to add real value to their offering. Cleverly doing this could help them enhance their products and services to the point that they become the Uber of their area. When looking at things this way, the potential begins to outweigh the threat.

  7. Smart Banking
  8. Effective segmentation, targeting and tracking are done by collating data from various sources and analysing it to create actionable insights. Big data is the engine that drives all of these efforts, so banks must get comfortable with understanding their data and that of other parties. A new era of personalization heralds the need for new skills to blend massive volumes of data from divergent systems into meaningful, actionable information. Banks will invest more in data scientists to leverage all the data they have and translate it into customer and business value.

Banks' Responses to FinTech

Banks will have a difficult time responding to all of the diverse FinTech companies and their services. Many banks will need to increase their spending and usage of technology to combine in-branch teams with FinTech or purchase these FinTech organizations outright. Here's how banks have responded so far to FinTech and how we expect them to continue to react over the next ten years.

Increasing Technology Spend

Total spending on technology in the banking industry has increased in recent years, and we can only expect it to increase as the threat of FinTech looms. With a higher revenue, larger banks will have an advantage over regional banks because they can spend more on technology. An example of where banks have been successful in increasing technology spend is mobile banking apps that provide convenience to consumers. Some have even rolled out small business and personal loan platforms to make the process much simpler for people who need a loan.

Partnering with FinTech

To beat own competition, sometimes you have to join your contest. Many banks have started partnering with FinTech companies, which has enabled them to grow their revenue in areas that banks lack expertise and scale. FinTechs can benefit from this partnership because it will diminish their customer acquisition costs and monetize their innovations in the financial sector. FinTechs will also gain access to stable funding and use the bank's network to grow their customer base. On the flip side, partnering with a FinTech company could confuse the specific duties between FinTech and the bank. Banks could be sent to be a back-end processor while the front-end business is taken away from them. A bank could also potentially lose direct contact with the consumers it serves, along with the personal data they need.


Tech companies in the banking space will be the biggest threat to traditional banking. With the large company entering the payments space and Amazon offering working capital loans to merchants on its platform, we can expect to see more threats come out of the woodworks.

Tech titans like those we've just mentioned have reach and visibility far beyond those of most banks. Banks could face a competitive threat. For right now, we don't believe these giants have any plans to enter the banking space fully.

Technology will remain at the forefront of banking in the future, so banks need to adapt to the fast changes. Some challenges make it difficult to some extent, but also some solutions are there to these challenges. In addition to established competitors, Fintech companies often face doubts from financial regulators like issuing banks and the Federal Government.

Data security is another issue regulators are concerned about because of the threat of hacking and the need to protect sensitive consumer and corporate financial data. Leading global Fintech companies are proactively turning to cloud technology to meet increasingly stringent compliance regulations.

Partnering with CogentHub will ensure that your customers and shareholders can have access to unhindered support 24/7 and will keep you ahead of the curve.

About the Author

Swarbhanu has completed his post-graduation in Applied Geology from Presidency University, Kolkata, India. His key areas are Content writing and Research Work. He is in this industry for one year. His areas of interest include Structural Geology, writing, Rock Climbing and Trekking, Painting and Playing Guitar.