More banking customers will be able to access their money through facial recognition
Digital technology has already transformed how people can bank, making it quicker and more convenient for them to access their money.
In 2018 digital banking is going to take a further step forward as new rules allow technology advances to benefit consumers. To give just one example, applying for an overdraft or mortgage has been a time-consuming process, involving visits to your branch and lengthy conversations before you received the green light.
Today, with computer programs capable of amassing and analysing complex information quickly, banks can make decisions almost instantly, sometimes without even needing to meet their customers. In fact, in many ways banks in the information age know their customers better than ever before. Algorithms have helped to make banking more personal.
New rules will give banks a clearer picture of their customers’ needs, helping tailor and personalise services
In 2018, new European Union rules on open banking should take this further. For the first time people will be able to give permission for their data to be shared across different financial organisations. This will drive innovation across the industry, paving the way for apps and products that allow customers to view all their accounts in one place and manage their finances more easily.
Crucially, the new rules will also give individual banks a clearer picture of their customers’ needs, helping tailor and personalise the services that they offer. In the same way that shopping websites and television-streaming services can recommend products that a customer might appreciate, increasingly their bank will be able to offer suggestions which could make life easier – such as nudges about when to save money, or suitable home insurance options when it’s time to renew. For people with outstanding debt, banks could offer simple, plain English advice on how to manage their finances.
The coming year will also see further advances in technology that will create a more personal and relevant banking experience. For instance, we should see a rise in robo-advisers – web-based services which make recommendations on investments, taking account of factors such as the customer’s age and risk appetite. In essence, these programs will make financial advice available to many who previously could not afford professional help.
Meanwhile, more and more banks will turn to biometric verification – such as voice, face and fingerprint recognition – as a means of allowing people to access their money. These features are unique to each of us, and operate as part of a sophisticated set of services to protect customers’ money and data. As smartphone technology advances, new models are often configured to offer a broader range of identification techniques as standard.
Of course the availability of such technology does not mean customers will automatically embrace it. Only 19 per cent of people currently say they would trust a robo-adviser to help them make investment decisions, according to HSBC’s Trust in Technology report, which surveyed more than 12,000 people across 11 countries. The move towards open banking also raises concerns about the risk of security breaches. Not everyone will feel comfortable allowing greater access to their data.
The onus is on banks to show that they will handle information securely, build in safeguards to new systems, and above all give customers a clear explanation of the changes they are making and why. But if the financial industry can respond to these challenges, it will ultimately mean greater choice and more responsive services for customers within a safe and secure framework.