Digital wallets and AI are mainstream in 2020's new world
The world has undergone a paradigm shift. The COVID-19 crisis has increased technology's influence and the process of digital transformation to create a fully digital world. The financial industry was particularly impacted by these shifts, with both consumers and companies around the world experiencing a drastic change in their payment habits and methods.
The post-pandemic digital era will be marked by new financial formats and experiences, including 100% digital banking, mobile wallets and artificial intelligence, with these technologies moving beyond the hype and continuing to triumph once the crisis is over.
The coronavirus pandemic has fueled a transformation in our financial ecosystem. According to the World Retail Banking Report, 48% of banking companies around the world have already made the decision to enhance their digital innovation capabilities, and more than half of their customers are expected to use digital banking solutions for payments, cards and retail bank accounts in the next three years.
As a consequence, traditional banking will now have the mission of adapting its virtual channels to guarantee these processes. Some of these solutions include digital onboarding, which will facilitate the registration of accounts or banking products in a completely digital and remote way, as well as the adoption of technologies such as tokenization, biometric verification, push notifications and others.
You cannot leave home without a wallet. This traditional object has always been an essential item in people's lives. However, cell phones have taken center stage in the last decade, especially with newer generations. According to research from Common Sense Media, an independent nonprofit organization dedicated to helping kids thrive in a world of media and technology, 53% of children in the United States already own a smartphone by the age of 11, while 84% of teenagers have access to their own personal phones.
This development has made it increasingly simple to pay for things with our mobile device, rather than having to carry a physical wallet. Furthermore, digital wallets also provide consumers with added benefits such as not having to share personal data when paying, providing a greater sense of security and control, reducing the possibility of fraud and minimizing physical contact with contactless payments.
With over half of the world’s population predicted to be using digital wallets by 2024, this technology is paving the way for the future of banking and will be here to stay once the pandemic has passed.
Virtual assistants are also increasingly present within companies. This is the simulation of human intelligence processes carried out by machines and computer systems that can be extremely beneficial when it comes to automating processes, increasing performance and improving productivity.
Despite the fear that algorithms could replace people, it is important to note that they actually function as support, helping to optimize information, detect problems quickly and improve the user experience. In 2019, chatbots registered growth of almost 30%. During the coronavirus crisis, virtual assistance company Zendesk observed 90% growth in the use of chatbot technologies.
Banking will not be oblivious to this reality. Technologies such as voice banking, which through natural language allows transactions and various operations such as transfers, payments or even checking bank account balances from a device, are already a reality. Currently, the world's biggest banks do not doubt that AI will be, among other things, crucial in order to provide another format of customer service and to strengthen their cybersecurity systems.
However, beyond the implementations that can be made at the technological level in all aspects, knowing the preferences and needs of different users is also crucial in order to optimize user experiences, operational efficiency and agility.
Ultimately, technology will be a defining factor of the financial industry. As the coronavirus crisis stabilizes and organizations enter the new normal, they will have to determine the technologies they want to invest in, in order to maintain a competitive edge and remain at the vanguard of innovation.