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April 24, 2023

Future of Fintech in Banking

By Rameshwar Singh

Globally available banking products and digital currency like Bitcoin are pushing banking institutions to find new ways to keep up with the growing demand from customers who want faster transactions, more control over their assets, and to maintain strong security. In conjunction with this shift, the next 2 to 5 years will see digital banking doubling down on enabling ease of use, data protection, data accessibility, and data privacy through various technology solutions. This will include cutting-edge solutions like blockchain and biometric data.  

Banking is clearly heading towards a full embrace of the non-traditional model, which begins with blockchain. A blockchain is a security product that you can use from any linked device with any digital application. It is a shared, immutable system that records information in a way that makes it nearly impossible for hackers to access or alter confidential data. Every block in the chain is encrypted with several transactions, and a record is automatically added to every participant's ledger with every new transaction. This process creates tighter security and is vastly more simple to manage than popular alternatives. Only people in the chain can unlock it, so if someone abruptly tampered with any piece of the chain at all, it would immediately be apparent. If a hacker wanted to corrupt a blockchain system, they would need to change every block in the chain the same way across all distributed versions. 

In addition to blockchain, biometric data will become more widely adopted in digital banking over the next two to five years due to its ease of use and security. Biometric data is a set of information that uses fingerprint scanning and facial recognition mechanisms to secure an individual's banking information. The banking world is familiar with the applications of biometric data, but it needs to be utilized on a global scale in order to create consistently secure global banking products. 

Looking ahead ten years, the primary goal in digital banking will be to enable broader access to the basic digital wallet, digital assets, and globally available banking products, like chequing and savings accounts and RRSPs (Registered Retirement Savings Plan). As access to these digital products improves, institutions can offer more. Digital banking customers will have the luxury of choosing which currency they need, under what terms, and what range of benefits they want. This trend, known as Digital Banking Democratization, is poised to have a fundamental impact on the way people all over the world manage their financial assets.  

A similar trend will be seen as financial institutions provide greener solutions for digital banking products. For instance, they will move towards more paperless options such as Bitcoin or other cryptocurrencies in the interest of sustainability. People are warming up to cryptocurrency, and they are eager to explore the extent of control that decentralized financial services can give them. Some of these options won’t even require going into a bank.  

The Metaverse is also a rapidly expanding space that cannot be overlooked. With Metaverse payments, customers can use AR/VR headsets to visit their banking branch virtually, talk to a customer service rep, and conduct any of the transactions they could in person. This could be especially useful for disabled or elderly people or even someone who needs to make a transaction at a moment's notice. 

As with any new development, there will be road bumps on this 10-year journey, but if you familiarize yourself with the benefits of any of these new products, you will be able to make confident decisions about your financial future.