World Bank: Nearest Future of Banking Industry

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The forth-industrial revolution has reshaped the banking industry and World Bank, influenced the customer experience, and completely changed the vision we had regarding the bank of tomorrow. Nowadays, change is defined in weeks and new applications can be outdated before they are even released. This ever-changing transformation of the banking landscape is mainly due to the automation of financial services through FinTechs. These relatively new emergents in banking are defined as businesses that use technology to ameliorate the competitive advantages of traditional banks through developing new platforms that will enhance the efficiency of the established banking model and provide a more affordable infrastructure. According to The Pulse of Fintech Q1 2017 of KPMG, 63.1% of consumers across the world have started using FinTech services, which demonstrates the way FinTechs are taking over the financial world. Automation through chatbots is being implemented in diverse companies (according to Gartner, chatbots will power 85% of all customer service interactions by the year 2020) to reduce human-managed processing freeing up employees for more value-added tasks. Further, chatbots can respond to customers faster and in a more precise manner. For instance, one of the most important applications of automation in banking is certainly COIN by JPMorgan Chase, an “intelligent contract that has saved more than 360000 hours of back-office activities using chatbots able to analyze contracts improving, therefore, the efficiency of the overall banking experience for customers” ( Notwithstanding FinTech’s efficiency, banks consider its implementation in their firms expensive and require a professional and agile workforce. However, “financial institutions that have automated their processes realize 75% cost-savings” ( Hence, the cost of not adopting these innovations would be much more expensive in the future.

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The world is constantly changing with technology at the heart of this transformation. FinTechs, artificial intelligence, and big data are revolutionizing the concept of traditional banking leading to a substantial shift in customer expectations by offering unique services centered on personalization, relevance, and convenience. Sean Park, the founder of Venture-Capital firm stated that: “ubiquitous mobile computing, exponential growth in data, and continuous advances in machine learning and artificial intelligence will transform finance into an always-on, algorithmically driven industry” ( By using advanced algorithms and implementing recommendation engines, Artificial Intelligence can identify patterns within structured and unstructured data to form a 360-degree customer view. This data offers a greater understanding of individual customer needs and efficaciously predicts customer behavior. Hence, FinTech can suggest customized and tailored products to the consumer. Likewise, cognitive robots are capable of communicating, making decisions by mimicking human logic, and even detecting customers’ emotions. The upsurge of digital devices conducted a fundamental change in the method consumers opt to interact with their banks, which has created a gap between what customers need and what banks provide that has been filled by the digital revolution. Although banks have the scale and a larger customer base, FinTechs have seen massive adoption due to their customer-centric culture and effective data management laying the foundation for a more relevant and trusted bond between customers and FinTech companies leading to customer adoption and eventually loyalty.

“The financial crisis and the Great Recession posed the most significant macroeconomic challenges for the united states in a half-century, leaving behind high unemployment rate and below-target inflation and calling for highly accommodative monetary policies” (Jerome Powell, chair of the Federal Reserve, 2019). According to CNBC, the FinTech revolution is mainly due to the abiding distrust in banks since the great recession has caused banks to confront a long and strict regulatory process, which left a gap in the industry. FinTechs intervened and revolutionized the banking services by combining efficiency and security. Swindle detection and prevention is the priority of FinTechs since the banking industry is consistently being ject of several forms of fraud. In other words, anomaly detection is an aspect of AI’s implementation in the financial sector, which could help increase the reliability of credit card fraud detection. The software can study a large amount of data and recognize patterns within the databases using machine learning. Likewise, to minimize errors and reduce risks, FinTechs have established new face recognition programs that can be used at ATMs. However, the potential of such innovations is not limited to that. Nowadays, palm vein recognition is the most secure method to prevent fraud since the vascular pattern is more complicated than fingerprints. Namely, Fujitsu’s PalmSecure technology has a false acceptance rate tested at 0.00008 percent, and false rejections come at just 0.01 percent, much more accurate. Hence, the digital revolution has gained the trust of customers that banks lost several years ago, shifting the power and scale from traditional financial institutions to the new emergents creating by that a new era of economic power.

In conclusion. High-interest rates, hidden fees, and slow deposit growth are proving the reality underlying the current banks, these facts need to change and surely it will since FinTechs are thoroughly revolutionizing the banking landscape and World Bank from traditional and outdated to completely new and agile. For the last 10 years, the FinTech industry has been leveraging new technologies to meet customer expectations thereby increasing security, improving efficiency, personalization, and convenience and it will not stop until it provides financial inclusion for everyone in the world. Nothing will stop this digital revolution and certainly not banks, as Mahatma Gandhi said: “First they ignore you, then they laugh at you, then they fight you, then you win”.

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