How Will Technology Change Banking in 2016?

Featured article by Calvin Paige, Independent Technology Author

Last year, the big banks continued to invest in modernising their infrastructure as well as put more energy into focusing on delivering their services through digital channels, such as internet banking and smartphone banking applications. But, digital transformation continues to hit the banking industry into 2016, with the competitive landscape intensifying further. Banks are continuing to fight on a number of fronts, with a wave of digital challenges, tech giants and fintech startups posing a threat that’s unlikely to go away any time soon. So, how can we expect to see technology change, or even transform, banking this year?

Increased Pressure from Tech Giants

It is no secret that one of the major concern for banks is the constant pressure from the likes of tech giants such as Apple, Google, Facebook and Amazon. This year, we can expect the pressure to build, with these companies putting even more effort into their consumer relationships and working on further inroads regarding payments. Apple launched its popular Apple Pay service last year, and Google is set to follow with ‘Android Pay’ plans in the pipeline. Barclays is one of the few banks with its own wallet, known as Pingit – and it will be interesting to see if more banks follow suit this year or simply leave it to the leading tech firms.

Emergence of Blockchain and Bitcoin in Banking

According to latest blockchain news, the technology generated a lot of interest with the banks in 2015, and is set to continue throughout this year. Blockchain technology could well be en-route to transform banking as we know it, with a number of big-name banking groups, including Barclays Bank and the Royal Bank of Scotland, having participated in projects to test blockchain-like technology for banking run by financial tech firm R3. The vice-president of blockchain research and development at Barclays believes that the technology will open up a wealth of opportunities to banks, and will even be useful in cutting banking costs. By reducing the amount of manual processing needed and being able to cut out the middleman, banks believe that this more transparent process of making financial transactions will not only reduce costs but also help the government to tackle tax fraud and make fraudulent transactions more difficult.

Banks Set to Push Wearables Apps

With the Apple Watch, Fitbit, and other Smart Watch and wearable tech all gaining a massive increase in popularity in 2015, this year is set to be the year of the wearable. The launch of the Apple Watch convinced more consumers to get on board, and banks are under mounting pressure to provide banking solutions for the growing wearable industry. With a vast number of consumers already utilizing mobile banking applications for smartphones and tablets, it will come as no surprise that most major banking groups hope to have rolled out an application for wearable tech within the next two years, with 15% of banks already planning a launch for 2016.

What are your thoughts on the impact of technology on banking?