One of the most important sectors of the world economy is banking. The development and prosperity of a country are dependent on the banking sector. There are many services that banks provide, such as deposits, loans, credit and debit cards, online banking, foreign exchange, investment products, etc., all of which make a country function smoothly. The banking industry plays a critical role in the economy and in the lives of individuals and businesses.
After the internet boom banks started adopting modern digital technologies in order to continue performing their important functions better and in a more efficient manner.
Banking organizations are adopting the following technologies as part of their digital transformation in 2023:
1. Cloud-based banking system
Cloud-based computing is a type of computing system that relies on the remote computing system rather than having local servers. In a cloud-based system, the data and the application are stored on remote servers and accessed over the internet. Banks are embracing this technology and moving their systems to the cloud, and this trend is likely to continue this year. Banking institutions are switching to cloud-based banking systems due to their reliability, security, cost-effectiveness, scalability, and accessibility.
2. Open banking and APIs
By making their data and services available to third parties, fintech companies, and governments, banks are creating new revenue streams. PayPal, Amazon Pay, India’s UPI, and banking applications are examples of the open banking and API digital transformation revolution happening in the banking industry. We will continue to see this digital transformation in the coming year as well.
3. Artificial intelligence, Machine learning, and automation
AI and ML are very hot topics these days. There are already some banking institutions that are utilizing these technologies. With these two technologies, banks can reduce errors, analyze big data, detect and prevent fraud, and automate various simple and complex tasks to provide their customers with the best service possible. The banking industry is adopting AI and ML technology for these very reasons. A number of banks will adopt AI and machine learning systems and platforms this year and in the coming years as part of their digital transformation.
4. Blockchain Technology
Blockchain technology has the potential to increase financial translation’s transparency and security. Cross-border transactions and digital identities are among the applications of blockchain technology being explored by many banks. Blockchain technology is used to create cryptocurrencies. The popularity of cryptocurrencies and the benefits of blockchain technology have led banks to explore different ways to use this technology.
5. OCR and Documents in electronic form
Everything these days is online and virtual. That is why banks are using technology such as OCR, which is a technology that automatically extracts information from paper documents, such as invoices and forms, and converts that information into digital formats which can be easily analyzed, stored, and accessed. Since managing electronic documents is easier than managing paper documents, many banks are turning to electronic documents.
In order to give better service to the customers and earn good profit the banking sector is exploring some of the aforementioned technologies. Several banks are already using these technologies and they are beginning to benefit from them, which is why these technologies are in trend for digital transformation in the banking industry.