Disruptive banking practices have been a term that has been beaten around a lot but surely there is significant evidence that online banking and mobile payment platforms have seriously dented the transaction volume that was earlier the exclusive domain of the banks. In order to coup with the loss of business and to reduce the business cost to cut down their competitors, Banks have introduced several online services and automated banking practices.
Automated banking services also make sense as it reduces the manual efforts to process these banking operations. Another benefit of such services is that it is easier to maintain and cost a lot less as compared to a physical branch network. Banks also don’t have to be open 24 hours a day to service their clients and only a limited support staff can tackle any issues faced by customers.
Now that we have discussed at length the overall utility of online banking services, let us discuss three services whose automation can help banks higher revenues in 2019:
AML compliance is important for banks as not complying to specific instructions of banking regulators regarding money laundering activities can lead to multiple million dollar fines. Currently, banks around the globe have hired a large number of compliance officers, some even have special compliance offices where manual reviews are performed against bank accounts and transactions performed through these bank accounts. Similar tasks can be performed by AML software for banks that can provide real-time screening for transactions and bank accounts that are considered to be suspicious. Any shaky activity through these bank accounts can be detected and any funds transfer beyond a set limit can be red-flagged instantly so that the banking organization is not held liable for breaching AML Compliance guidelines.
Remote Account Opening
Most fintech products allow their incoming users to create an account practically 24 hours a day and 365 days a year. On the other hand, most banks still require their clients to physical visit their branch in order to open an account. If banks are serious about retaining a substantial market volume in the face of raising onslaught from online mobile payment platforms, it is important that they start a remote account opening service as well that reduces the nuisance of visiting a physical branch in order to open a bank account.
Just like AML compliance, performing identity verification or KYC procedure is something that is required to be performed by banks and same as AML screening, a typical KYC process takes hours, if not days, to be completed. The manual review process for KYC and restricted customization options also makes it hard for banking customers to verify their identity. In order to reduce friction in the customer onboarding process, automated KYC has to be introduced that can not only collect personal information from incoming users in minimum possible time but can also verify those details in a matter of few minutes, if not few seconds.
Embracing new age tech is the only way of survival for large banks in this financial era where millennials prefer mobile payments rather than writing down cheques.