Fintech and Banks: How Fintech Plays an Important Role in Banks After the Pandemic

COVID-19 has impacted almost every aspect of our daily lives. The ‘new normal’ is slowly being adopted by many. For example, online meetings are becoming obsolete. People are moving to digital shopping.

These changes do not exclude banking. During the pandemic, there was a noticeable shift in the industry to a digital bank. McKinsey’s latest report shows that the country is now five years ahead of other countries in digital adoption for consumers and businesses in just eight weeks.

American Banker was told by Mike Mayo, an analyst at Wells Fargo Securities: “What we are seeing is the greatest acceleration in digital banking history.”

Digital banking has always included Fintech.

What exactly is Fintech?

It’s actually a combination of “financial technology” and “financial innovation.” Fintech is the application of different technologies to provide financial services to customers with minimal hassles.

A World Bank report reveals that the fintech market experienced rapid growth during the pandemic.

Digital banking has led to a decrease in customer satisfaction.

J.D Power found that banks’ overall satisfaction was declining due to the switch from branch banking to online banking in a 2020 study.

After the pandemic, banks must use fintech to make banking more user-friendly. This will ensure that customers are satisfied.

Virtual voice assistants

Traditional banking does not offer 24/7 customer service. Artificial Intelligence Virtual Assistants can offer 24/7 customer service.

Virtual assistants can help with things like managing your credit cards and debit cards, checking your account balance, paying bills, and so on.

What if banks use virtual voice assistants instead?

Perhaps you have used voice-activated devices such as Siri or Google Assistant to play music and get directions.

For offering services, banks also need virtual voice assistants. This will allow you to save time typing and find the answers to your questions.

However, very few banks offer voice-enabled virtual assistance. U.S. Bank Smart Assistant is an example. To make transactions, you can use a variety of commands such as “What is my balance in my account?” to see your balance.

Detailed view of your finances

Virtual assistants are mainly used to assist you with banking transactions. You need to be able to see where your money is going if you want to have control of your finances. You may have to make changes in your spending habits based on this information.

Banks should embrace fintech to help customers understand their spending habits. Erica, a virtual financial assistant from Bank of America, is one example. It offers a variety of banking services including:

• Take a snapshot of your monthly spending for a week.
• Monitor recurring charges.
• Notify you of any changes to your credit score

In short, you can get a clear picture of your financial life. It helps you manage your money in a better way.
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Fraud detection

Digital banking is more convenient. It is becoming more popular. Unfortunately, fraud is also on the rise.
Ryan Leblond is the manager of fraud prevention for ESL Federal Credit Union, New York. He says that “fraudsters have become more sophisticated in their methods.”

But artificial intelligence (AI), can help protect sensitive data. AI is guided by a set of rules. It then reviews spending habits and transactions. It can alert customers if it detects irregularities.

Let’s suppose that you are used to making small purchases. Your account suddenly shows a large purchase. AI will flag this as fraud and contact you immediately.

Banks need to utilize fintech to provide strong security so that their customers feel at ease using digital banking.
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Convenient payment methods

A large number of people switched to online shopping during the pandemic. Shoppers who shop in stores are more likely to use digital payment platforms that allow them to make cashless or contactless payments.

Banks should adopt fintech to upgrade their physical credit and debit cards and to implement tap to pay technology. This allows you to make contactless payments faster than inserting or swiping your card.

Due to their popularity and widespread use, banks should also adopt e-wallets. E-wallets are being developed by many eCommerce platforms as well as brands such as Amazon and Starbucks. These companies offer reward points and cashback for their e-wallets.

Banks need to partner up with other brands to reach more customers. Customers will also find it more convenient to use e-wallets rather than cash.

Biometric ATMs

To provide ATM (Automated Teller Machine), services, banks are installing biometric scanners and an iris scanner. You don’t have to carry your card anymore or remember your pin.

Biometric-enabled ATMs can use fingerprint sensors in conjunction with eyes and hands to verify authenticity. The problem is that fraudsters could create fake fingerprints and irises to compromise security.

Fintech allows banks to use palm and finger vein readers to authenticate customers.

The vein scanner illuminates the finger or palm of your hand with infrared radiation. Your hemoglobin absorbs infrared light to create a profile. The fingerprint’s accuracy is detected by its liveness detection.
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Conclusion

Fintech has made the financial industry more efficient and effective. It should be used by banks to provide a broad range of services to customers. Fintech offers many tools that can be used to assist even the most tech-shy customers, who are learning how to use apps to manage finances during the pandemic.

Once we are back to normal, many of our old habits such as online banking and contactless payments will likely continue. Even after the pandemic, fintech will continue to play an important role and be commonplace.