When it comes to bringing innovation to the world of banking and finance, what sort of apps might we see in years to come, and what areas are potentially ripe for development? What is driving the development of new types of apps, and how will gadgets and voice-activated assistants such as Facebook Portal, Alexa and Google Home play their part?
B2B: the next wave of Fintech apps
While 2007 to 2013 was the era of business to consumer (B2C) financial services apps, the next wave of apps is likely to be more suitable for B2B processes and will harness the power of data collection via technologies such as artificial intelligence (AI), blockchain and the Internet of Things (IoT).
The goal will be to unbundle processes in financial services from traditional providers, encouraging creativity, innovation and competition. Interestingly, a lot of this will be driven by a wave of ex-bankers pursuing new opportunities to get involved in the Fintech revolution.
Banks’ customers will be unaware of this activity, because there will be a second underlying trend for consolidation, where end-customers access products and services via a single portal, and multiple apps access data via a single API.
While some back-end processes may be decentralizing in this new business model, it is unlikely that banks will need to surrender their core functions of saving, investing and lending money. While it’s true that Amazon already lends money to supplier partners and customers, businesses that require a loan running into millions of dollars are still going to approach their (heavily regulated) bank for that particular service.
What will change is the way in which back office processes are managed and reimagined. A lot of the low-hanging fruit has already been picked in the B2C environment, such as apps that enable consumers to apply for loans and credit that can be approved within minutes.
The next stage will be to identify any process that can be automated and to use machine learning and AI to improve it by ensuring that data is collected, shared and routed to the right places automatically, depending on a set of complex rules.
Just as the legal profession has seen a huge uptake of machine learning in the production of electronic evidence and contract writing, so will financial services adopt technology like robotic process automation (RPA) to cut manual tasks out of the day to day work of bank employees.
Anywhere there is a spreadsheet being manually updated in a bank is an opportunity for app developers to introduce a better, more efficient way. That includes financial modeling, credit risk decision making and even investment banking.
The pressure for change is undoubtedly coming from a generation of B2B customers who are now used to a less clunky and inefficient way to interact with providers and want to see the same user experience being made available in other areas of their lives that they get from e-commerce sites.
It’s good to talk
In the world of consumer applications, speed is everything and expectations are being driven to ever greater heights. In years gone by, it was acceptable for banks to expect customers to wait in their branches to speak to a customer service assistant who could help them open a bank account on the basis of a series of paper documents.
Today, it is possible to open an account or order a credit card in minutes. But even that is getting too slow for younger consumers, who would not think twice about using a home assistant like Alexa or even the Facebook Portal to take out a new credit agreement.
Remember when people were worried about entering personal data onto websites or over the phone to contact centres? It’s only a matter of time before home assistants are well ingrained in the Fintech development landscape.
