The Future of Banking is Biometry and Expanded Product Lines
These days, the world of finance is quickly changing, with many new ecosystems emerging. One of the main global trends that brings new business opportunities to the banking sector is the digitization of payments. Apple Pay, Samsung Pay, Google Pay and many other online platforms have already offered token services for banking cardholders. For instance, a bank’s client can now order their card with just a few clicks in the bank’s mobile application. Client onboarding is also becoming digital.
In addition to digital payments, here are trends our group of companies and others in the financial services sector are working on that I believe will drive the future of banking.
The core element of these new features is biometry, such as facial and fingerprint recognition. Once a bank has access to a client’s biometry, it can open an account for the client, issue a card and link it to an online wallet, allowing the client to pay or withdraw money at an ATM using a smartphone. This is already a reality in Kazakhstan and Russia, where our group of companies operates. These methods allow clients to forgo plastic cards and use contactless payments instead.
Biometry could also mean that the traditional SIM cards people are used to in their phones might be replaced by something digital. It’s possible to download to a client’s phone not only their banking card information but also a contract with their mobile operator. The operator would be able to identify each client using biometry and then provide them with a new SIM card and certain tariff plans. This could help mobile network virtual operators (MVNOs) boost their business. An MVNO owned by a bank could run its own billing systems and sell tariff plans through the mobile banking system, while the bank could transfer the client’s information to its billing system. Of course, client permission would be needed. To obtain such permission, the bank could offer clients cash back or bonuses for purchase, including free internet or mobile services.
Expanded Product Lines: Online Loans And Mortgages
Remote identification and biometry can transform banking, including the lending market. Banks and other financial organizations can now lend money online to a customer even if they haven’t met the customer in person. Once a client has been identified via biometry, the client can approve deals and documents using an e-signature. For banks, this provides an incredible opportunity to develop new products, such as online issuing of auto loans and online mortgages. For example, while being in the bank’s system, clients could safely take out a loan, buy a car and, if governments allowed it, even register it online. People could also buy or sell their property and possessions with less risk because the bank would keep these contracts and handle any violations of their clients’ interests.
I believe these are the key elements of a robust digital bank: information and the bank’s ability to carry out any asset-based transactions and facilitate registration of those assets. In this scenario, a client would be able to see in their mobile banking all their possessions such as their house, land, car and all taxes they should pay. They would also be able to sell or buy properties or take out insurance for those things. At the same time, banks could keep this information and use it for various tasks, such as in co-branding efforts with different partners. In turn, a client would be able to get tailored products by just clicking the OK button, because the bank would already have all the necessary information. Once the client allowed the bank to use data such as the client’s name or credit score, the bank could identify them online without a personal appearance at the office and make the system work more effectively for both sides.
The Future Of Banking
I believe the future of banks all over the world is the same. It involves expanding into certain product offerings, getting access to government databases for proper client identification and, where possible, integrating their work with the agencies that make car or property registrations. As a result, they can make assessments and issue both banking cards and SIM cards. This is a real revolution in the sector, and I expect it will come sooner than many may think.
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