With the proliferation of technology, banking customers are living in a connected world with their experience from other industries influencing their expectations from their financial services provider. This has led to an evolving customer-bank relationship necessitating banks to be more customer-centric by embedding themselves in customers' lives to meet rising customer experience expectations. However, banks have been facing challenges in meeting customer expectations, as they are troubled with legacy challenges both in terms of technology and culture. This document aims to understand and analyze the trends in the banking industry that are expected to drive the dynamics of the banking ecosystem in the near future.
Retail banks need to get the message: Short message service (SMS) technology is a critical component of mobile customer engagement. The integration of SMS into the overall mobile customer experience is something consumers want. I invite you to read about how IDC views the role of messaging within retail banking, and about the steps banks should take now to deliver this important service to all consumers simply, securely, and reliably. Mobile has become a key component in the overall retail banking customer engagement strategy. The technology has had starts and stops, but the overall trend continues to show that customers are flocking to their mobile device to interact with their bank.
Hong Kong bank customers are willing to embrace new digital banking services based on AI and machine learning, according to a new survey by Unisys. The survey found that 60% of Hong Kong respondents are comfortable with a bank using software and algorithms to assess online credit card applications, but only 31% are comfortable with their use for home loans. "The Unisys Banking Insights findings suggest there is a great opportunity for Hong Kong banks to use smart software to lead decision making for commodity products such as credit cards," Unisys Asia-Pacific VP for financial services Richard Parker said. But currently consumers are less willing to use this for life events such as home loan applications which involve larger financial amounts and emotional involvement." Hong Kong consumers are also moderately willing to support data sharing in an open banking environment, but only if they can be assured that privacy and security concerns are met.
Through integrating money management tools as drivers of online banking, the bank has the opportunity to proactively offer financial facilities to customers and help them to manage their money. They can anticipate information based on the customer's actions. This is the typical upstream approach, where advice messages pop up on the user's screen before carrying out any financial action. This is just a drop in the ocean of the digital money management tool next generation. And this development may start the envisioning of mobile banking applications from the user's perspective rather than the bank's.
With technological advancement, artificial intelligence is set to touch and modify the financial sector, specifically retail banking in many different ways. A Narrative Science survey highlighted that 32 per cent of financial executive participants utilizes AI technology, such as voice recognition and predictive analytics. Moreover, an Accenture survey noted that 76 per cent of those surveyed believe most banks will use AI interfaces primarily for customer interaction by 2020. But AI is changing retail banking in more ways than one. IT costs are a pain point of retail banking, as they can account for as much as 10 to 15 per cent of a bank's total annual expenditures.