Banking as consumers know it, is on the way out – to be replaced by a bold new world of seamless, cardless, cashless financial systems that will change the way people live and transact forever.
This is according to Marius Coetzee, CEO of business solutions company Ideco.
Next-level banking will depend on the ability to create a trusted link between the physical and digital world, Coetzee told Fin24 this week. .
Here's how – in his view – banking is about to change forever.
1. Faster payments, fewer borders
Apart from impacting the way one uses mobile banking, cashless banking and self-help kiosks, the new innovations will impact ease of cross-border payments and bring about faster inter-bank transfers.
2. Say hi to AI
Artificial intelligence (AI) can be used to revolutionise customer service and to answer calls. Voice recognition technology can also be used to identify customers.
3. Big brother vs. blockchain
Cryptocurrencies and blockchain technology mean more and more ownership is given to the individual transacting via a particular platform, rather than placing the banking industry at the centre.
It is estimated that daily there are $700m worth of cryptocurrency transactions made globally. "Customers trust their bank and a bank needs to successfully and professionally work with clients' assets. The reality is, however, that technology enables individuals to do business without the banks. Different cryptocurrencies are available, which brings a risk, but also benefits for consumers," said Coetzee.
4. Automation of identification
Evolving technology will also enable banks to reach customers wherever they are, making automation of customer identification crucial. Biometrics like facial recognition, fingerprint recognition or iris recognition can connect a personal identity with a digital identity. Apart from increasing security, this would greatly reduce the current estimated cost of R1 800 per account for a bank to open a new customer account.
5. ...So, banking will be more accessible, too
This cost reduction will make banking more accessible. Currently two billion people in Africa do not have bank accounts. "To become economically active, you need a bank account and you need a trusted digital identity," says Coetzee. "Biometric technology is an enabler in the digital banking space. Technology can enable consumers to verify their identity without having to supply a copy of their identity document, and biometrics play an important part in the process."
6. Safety and privacy for the win
In Coetzee's view, biometrics is a safe – and powerful – tool, with users' privacy better protected.
"It basically verifies who you are, but your biometric information is not shared, it is just to match to see who you are," he explained.
7. Central identity banks
Overall, Coetzee reckoned the next two to five years will see banking becoming "effortless".
"Our profiles will be entrusted in technology. The way I see it, identity banks could arise for this purpose. You will entrust your profile to such an identity bank, enabling you to trade without having to release your identity to organisations each time."
He added: "You might not even know you are being verified. Your profile will just be recognised, enabling you to direct services in terms of your needs."
By: Carin Smith