Welcome back to our new digitalML blog series, TechTrends, where we’ll be rounding up industry news from across the banking sector. This week, we’re looking at digital transformation in banking through exciting product launches happening both at the front and back-end.
As we covered in TechTrends Week 1, companies are trying to build better customer experiences based on consumers’ evolving expectations. We’ve seen a trend towards digital banking innovation; a simplified banking process, more consumer-friendly products, and various digital payment methods. However, this transformation goes beyond just the payments sector and new apps being built. It’s reaching the entire banking industry. Now, to compete in these digitally disruptive times, all banks need to create new and innovative products that exceed what consumers currently have. The future of the banking industry is transforming, and when banks have many silos and legacy systems, how do you implement a successful digital transformation strategy to deliver on these innovative ideas and compete against new entrants?
Let’s take a look at some exciting new products that have recently launched to meet consumers’ evolving expectations:
Fifth Third Bank to debut mobile banking kiosk at NAACP convention
To better serve the low-to moderate income communities that have a harder time making it to a “brick-and-mortar” branch or don’t have easier access to educational and financial tools, Fifth Third Bank is providing a Banking to Go mobile kiosk. Previously they also started a Financial Empowerment Mobile, also known as an eBus, to have financial classrooms in these areas so residents can have an easier path to opening accounts, getting their credit reports, etc.
Citi Launches Outlier Payment Detection For Treasurers
In June, Citi announced their Payment Outlier Detection solution that will be launching in 90 countries. This tool uses Artificial Intelligence, Machine Learning, and data analytics to figure out which payments could be fraudulent activity versus the ones that are real transactions. Once this is detected, customers can use CitiDirect BE and CitiConnect electronic banking platforms to approve or reject the payment. Through this new tool, Citi is hoping to address the challenge of rising cybersecurity risks and an increase in transactions consumers make.
Stripe, the world’s most valuable private fintech company, is getting into lending
Stripe is adding a new arm to their business called Stripe Capital. This new venture will help online companies who are looking to grow their businesses by offering them loans. By implementing this new part of the business, small businesses who are trying to expand can receive a loan that is usually well below the average amount a bank normally offers. Also, Stripe, like many other technology companies, is getting rid of FICO scores to asses someone’s credit-worthiness and implementing a process that evaluates their payment history in their own platform.
As you can see, established banks have already started moving towards new product launches that meet customer demand. These products that are being created not only satisfy customers in ‘social justice and equality’, but create new ways that they can bank; improving the consumer experience. But banks aren’t the only ones that are trying to promote new digital products to consumers. Fintechs and other technology companies are entering the industry at full-force, by delivering products that are digital and transformative to the status quo. Large banks need to take advantage of their perch and existing large customer base and deliver enticing and new products, otherwise Fintechs, technology companies, and other new entrants are going to start picking away at their market share and revenue streams.