Banking industry has seen a tremendous revolution today. With digitalization, the way we bank has changed to a great extent. Gone are the days when plastic money was considered as advancement in banking technology. Today plastic money like debit cards, credit cards, and other cards is almost considered bygone. Nowadays banking services are right in our palm with just one touch access to your personal banking account. It is more like, ‘Click to bank’ rather than ‘Walk into a bank’.
Funds transfer, deposits, bill payments, credits and other banking services has just become a matter of click or tap with your bank being right at your fingertips, wherever you are.
Banking industry is on the rise. The ‘blockchain technology’ has given wings to the banking industry. Blockchain technology keeps records of all data exchanges. Here each data exchange is a ‘transaction’. The transaction is verified and added to a block. This block is then attached with the previous block forming a chain. The advantages of blockchain technology over traditional banking technology are better accessibility, greater transparency, lower fees, quicker transactions and most importantly cyber security. However, countries are reluctant to adopt this latest technology since Blockchain is a decentralized system that is independent of central bank or government. Still many countries and firms are adopting this technology owing to its benefits like data security over traditional banking technology. Cryptocurrencies like bitcoins are based on blockchain technology.
According to ResearchAndMarkets.com, ‘Blockchain spending in the United States will increase from $3.12 billion to $41 billion by 2025.’
IBM is paving the way for banks and other regulated financial institutions to join the blockchain revolution by launching Blockchain-based Global Payments Network using Stellar's Cryptocurrency.
Wuabit will start providing crypto wallet services to whatsapp users with the digital cryptocurrency Bitcoin.
Digitalization has made banking one of the most profitable industries, as the transaction charges are very less in digital banking. It has also opened the financial services ecosystem to new and niche players. Therefore, companies from different domains are adding financial services to their existing businesses. This is because companies want to increase their product sales by providing easy credits to their customers. This also helps in retaining the customers, as they need not hunt for other financial services for buying the same company’s product. Companies today believe in providing one stop solution for all the needs of their customers.
For example, Ant Financial Services, a subsidiary of Alibaba Group, provides financial services like easy loans for traders to trade on Alibaba.com. This helps the traders in saving time and approaching other banking services with higher interest rates for their loan requirements.
Likewise, auto companies like Mercedes Benz provides their customers with financing, leasing and payment solutions through its financial arm Mercedes-Benz Financial Services. Volkswagen too provides with these services through Volkswagen Financial Services to retain their customers.
Providing financial assistance help the customers to close their deal in time and thus building a relationship with the company. The latest addition to this is the recently launched Apple's Credit Card which provides its customers with zero annual, international, or over limit fees. Not only product companies, but ecommerce companies have also extended their financial services.
Also Amazon Pay, an online payments service by Amazon provides with an ability to use the payment methods to make payments for goods or services on amazon.com as well as any other third-party merchant websites or apps.
Digitalization is emerging as the key to survival in banking. Banks must improve the quality and efficiency of regulatory compliance to meet their ongoing financial-stability, prudent-operations, and resolution obligations. Alongside this, setting the regulatory stage for the future of banking is also needed. Owing to this, European regulators have stepped up their engagement over the past 12 months. Data protection has become an increasingly important issue now that Europe’s General Data Protection Regulation (GDPR) has taken effect.
Banking, Accounting, and Financial Services industry will always keep emerging provided it improves the quality and efficiency of regulatory compliance. However, achieving this will require finding leaner and smarter ways to manage the high volume of regulatory revisions, as well as experimenting with new technologies.