Is it so important for banks to go digital?
Global digitalization is a process which started years ago, but the recent COVID-19 pandemic has shown that online solutions are more than welcome. Traditional banking services are not so popular and effective anymore. Most clients – especially generation Y – readily reach for modern tools. After years of testing they are mostly stable, run smoothly and grant a high level of security. That makes even elderly people feel comfortable while using online banking.
Such rapid growth of expectations towards financial software creates literally a gold rush. Banks that can keep up that pace win trust and a large number of new clients. Entities that are strictly devoted to the previous service model incur losses.
Traditional banking has a really long story, reaching far into the medieval ages. However, an inflexible approach to the market may turn out to be their doom. According to the Statista website, so-called neobanks (entities that operate solely on the internet) are growing stronger and in a few years may pose a serious threat.
What are the main challenges that arise while making banking software?
Financial sector is heavily regulated by law. At the same time, an entity must ensure that provided services are secure and must run simultaneously for thousands of clients. There’s no point in arguing that manual labor of clerks cannot be efficient enough to satiate market hunger. Thus, banking software development is a crucial step to implement automation. However, it’s not as easy as it may seem, while banking entities have to cope with requirements connected with:
– biometric authentication;
– outdated technology stack ang legacy systems;
– legal regulations such as GDPR, PSD2 (and upcoming PSD3) and PCSDSS concerning payment cards;
– evolving ways of communication – simple customer service is not enough while people expect video calls, AI assistants and selfie/OCR bank account setup.
It’s worth noting that different kinds of financial services require a slightly different approach. Retail, corporate and investment banking need tools designed for a particular niche of client.
Discover top trends in software development for financial sector
Dynamic technology evolution touches each and every sector in our lives. From smartphones and cars to banking software, we demand more fluent and more convenient use. How does it impact banking software? What are the new directions for developers?
One of the hottest topics is machine learning (ML) which is a part of a wider AI topic. ML algorithms are used to gather data about clients to help in the decision-making process. It may be used for credit underwriting, fraud detection, task automation and security management.
Another “holy grail” is biometrics. Perceived as an ultimate security measure, biometric data help to authorize logging, payments, withdrawing money from ATMs and most of all – onboarding new clients. There are a few biometric methods – from face recognition, through fingerprint and iris scans to voice recognition and behavioral biometrics.
Banking software development is an expensive and time-consuming investment. Correctly done, however, it can greatly reinforce brand, automatize a lot of business processes and attract new clients.
2023-12-28 15:07:27