Digital forces are teaching traditional banks new methods

One of the most established industries in the world is now experiencing a modernization that has been long overdue as a consequence of the competition from fintech start-ups and the growing demand from consumers for always-on service. This is driving financial institutions toward rapid digitization.

Digital forces in Huawei banks

The change may be compared to “changing a car’s engine and wheels mid-race, without stopping,” as said by one of the various experts who were interviewed for the Digital Finance issue of Transform, which is Huawei’s thought leadership magazine.

It is probable that the introduction of digital technology will mark the beginning of a golden age of digital banking. During this time, clients will get personalized assistance in the form of financial advice and other sorts of individualized assistance from artificial intelligence.

A futurist by the name of Brett King, who is also the author of the book Bank 4.0, claims that “we suddenly have the technology to provide a bank account that can actually help you manage your money.” Artificial intelligence (AI) and other technologies, together with other advancements, have made this feasible.

It is anticipated that “the early wallet systems that we see today, like [China’s] Alipay and WeChat pay, as well as Paytia in India and Kakao in South Korea, will evolve into AI-based bank accounts that really help us with our day-to-day money management.” Alipay and WeChat pay are two of China’s popular mobile payment systems. Paytia is used in India. In South Korea, they call it kakao. The combination of human advice with AI assistance is anticipated to become more standard practice in financial institutions all around the world in the near future.

King and Dame Jayne-Anne Gadhia, who created the Snoop money management software and was the previous CEO of Virgin Money, are featured on the cover of the book. Virgin Money is a division of the Virgin Group.

She, like Brett King, extols the potential advantages that AI can bring to the banking business, but she also cautions that financial organizations cannot afford to overlook more traditional talents. She believes that AI is still in its infancy and has a long way to go before it can be considered useful.

She continues by telling me, “You can’t just use a banking app.” “It is necessary for you to have the capability of understanding both the inputs and the outcomes. We should all make it a priority to improve our numeracy since it is so simple to access and the results come back so quickly.

According to Dame Jayne-Anne, the widespread perception that financial institutions have been slow to implement full digitalization is not accurate. One thing is certain: you can’t just solve the problem by waving a magic wand over it. Not only is it challenging, but it is also expensive and risky to do so. Because of the scope of the endeavor, the preparations will need to be carried out over a long amount of time.

The fight between legacy banks and startups has been compared to the race between the tortoise and the hare by David Brear, the chief executive officer of the financial services consultancy .

Brear argues that there is still a long way to go in the race, despite the fact that the fintech hares may be running faster at the current time. This is the case even if the legacy banks still have hundreds of millions of customers all over the world.

His perspective is that the process of modernization in the banking business is a Darwinian fight. “It’s not the strongest of the species that survive, but the ones most adaptable to change,” he says. “It’s not the strongest of the species that survive.” It’s not the most powerful members of the species that end up surviving.

“What we’ll start to see is the march towards self-driving money,” in which banks automatically move the money of their customers around in order to deliver the biggest products and the best rates. “What we’ll start to see is the march toward self-driving money.” “What we’ll start to see is the march toward money that drives itself,” the speaker said.

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