THE DIGITAL BANKING,

FUTURE AND CHALLENGES

Four (4) Banking Trends to

Watch

Presented by:
MR. ZAYAD JIBRIN
School of Management Studies
(3rd Year BBA).
INTRODUCTION

Bitcoin, PhonePe and PayTM. These are just a few of

the buzzwords that have come to embody the important
changes facing the financial industry. As the end of the
year approaches, here are 4 banking trends to watch in
2019 and beyond!
No matter the time of year, it’s important for financial
professionals to ask the question "What will this
year look like?" And more importantly, what’s the future
of finance going to look like, and challenges?
 FOUR BANKING TRENDS

1. The rise of cryptocurrency and the prevalence of

blockchain

2. Artificial intelligence is on the rise

3. Changing consumer behavior leads to a changing

branch network

4. Uncertainty in regulation and deregulation

1) THE RISE OF CRYPTOCURRENCY AND
THE PREVALENCE OF BLOCKCHAIN
That said, there's still a lot of uncertainty about
what cryptocurrencies are and what they can
do. One of the most important features of
cryptocurrencies is that they rely on a technology
called blockchain.
In a very general sense, blockchain is a technology
that relies on a global network to jointly manage a
shared database that records transactions on a public
ledger. It's renowned for its security, as you'd have to
break into each and every computer to have access to
the data. If you're interested in learning more about
cryptocurrencies and blockchain, I recommend
this Cryptocurrency for dummies article; it really
helped me grasp the subject.
What Do Cryptocurrencies and Blockchain
Mean for Banks?
1. For many financial institutions, lending is still a paper-intensive
process

2. Blockchain's digital ledger has the potential to make this process

much more secure

3. Blockchain could also be helpful from a regulatory compliance

perspective.

4. Blockchain may even make the process of lending faster and

cheaper, in addition to being more secure.
2) ARTIFICIAL INTELLIGENCE IS ON THE
RISE
Artificial Intelligence, or AI, technology is on the rise.
In fact, some experts estimate that by 2020, we will see
a computer with the same processing power as the
human brain. Financial institutions are figuring out how
they can use artificial intelligence to “decrease costs,
enhance revenue, reduce fraud and improve the
customer experience.” From chatbots to BSA/AML
compliance work, AI and other analysis
heavy advances like deep learning and predictive
analytics will have a big impact on financial institutions
in the years to come.
“AI” CAN BE BROKEN INTO THREE
MAIN TYPES

1) cognitive automation

2) cognitive engagement

3) cognitive insights
HOW CAN ARTIFICIAL INTELLIGENCE
IMPACT FINANCIAL INSTITUTIONS?

1. SALES:
a) AI has the potential to improve the customer experience by
analyzing the data and providing better insights into
consumer behavior.
b) Cutting-edge voice and chatbot technology will likely be
incorporated into the process for online sales. In addition, the
insights AI delivers can be used to support marketing and
sales communications.

2. MANAGEMENT:
a) Because AI has the potential to supplement and even replace certain
human function, the technology and automation may result in reduced
costs.
3. OPERATIONS:
Using AI to analyze legal documents and identify the most
important details and clauses with their recently adopted coin
technology.

4. COMPLIANCE:
AI is used in compliance primarily in investments
management and banking, because of the volume of data and
transactions. It's helpful for screening for money laundering,
market manipulation, insider trading, and third-party risk
 3) CHANGING CONSUMER BEHAVIOR
LEADS TO A CHANGING BRANCH
NETWORK

Customer behavior in all industries, including banking,

is radically different than it was 5-10 years ago.
With the surge in mobile banking over the past few
years, the idea that “more banks = higher profitability”
no longer accurate. The bank branch is no longer the
only, or even the primary, way that customers can
interact with their bank. This is particularly true of
millennial customers.
How A Better Branch and ATM Network Can Lead
to Growth?
The everyday customer is just as interested in the quality of your
website, mobile app, and ATM locations as the locations of your
physical branches. Some ways that banks are responding are:

1) Replacing older ATMs with on deposit-taking ATMs in strategic

locations.
2) Investing in online and mobile banking that really meets their
customers' needs.
3) Assessing the location of their branches, to determine if any can be
closed without negatively impacting their CRA or fair lending
performance.
4) Identifying locations for new branches that will attract customers of all
demographics, and serve the unique needs of the community.
5) Evaluating ways to save money and reduce risk throughout their branch
network through branch relocations, downsizing, and strategic
renovations.
4) Uncertainty in Regulation and
Deregulation

1) A new age of governance: in order to improve effectiveness, the RBI

is “signaling a new age of governance and accountability” by introducing
new proposals and rating systems specific to board governance. Among
the components that will be scrutinized will be senior management
accountability, fostering a culture of controls, and “conducting self-
assessments in line with the proposed guidance with scope that includes
capabilities and governance structure.”

2) Consumer protection: despite the current upheaval, it’s important to

note that this will not eliminate the topic of consumer protection. Today's
consumers are more educated about this topic, and community action
groups still see themselves as essential protectors of communities. As a
financial institution, it's a good idea to prioritize consumer protection and
fair lending compliance. Not only will this signal a commitment to
compliance, it can also serve as proof that you understand and prioritize
the needs of your community to potential customers.
How Can Financial Institutions Respond to
Uncertainty?

Despite the changes, here is tactic financial institutions can

use to respond to the regulatory uncertainty: pivot from
rebuilding after the great recession to encouraging intelligent,
sustainable growth. This idea is based on a recent
report released by deloitte about the 2018 regulatory
landscape.
THANK YOU.