Banking Trends

Banking trends: big American IT firms against financiers

Banks are speeding up their digital transformation. Business owners have an understanding that new technologies are associated with considerable income. The trends of the banking sector in 2019 share the overall trend of IT development. It’s time to engage in biometric authentication, big data, global information systems with artificial intelligence and UX analysis (user experience). At the same time, there is a tendency that can hardly please bank employees: more than 9,000 branches have been closed in the United States over the past 10 years. There is a case when bots replace employees with the development of remote banking, the need for offices at every step is eliminated.

The relationship between the banking sector and IT companies is curious. Large Amazon level corporations do not have serious offers for the money sector. Rather, on the contrary: they don’t need financial conglomerates. In February 2019, Google, Apple and a number of IT companies appealed to the Federal Reserve with a request to introduce a system of fast payments. While officials will deal with the issue, IT specialists want to get access directly to clearing, bypassing intermediaries. Facebook has permission to create its payment system and already operates it in the USA, UK and France. Alibaba Group (China) has an alternative settlement platform Alipay since 2004. In Russia, the situation is a little different: large corporations cooperate with the banking sector. For example, in 2019 the testing of the remote biometric authentication system from Rostelecom was completed. The database of all clients is intended for use by financial institutions, and in the future mobile operators will be connected to the project, providing the system with current phone numbers of the users.

Banking trends: offices are closing, investments in startups are shrinking

The tendency to close branches in 2019 will only increase: offices with employees will remain only for a part of the population not connected with the Internet and mobile applications. The technically illiterate part of society is shrinking: in Northern Europe, 96% of citizens use Internet access in one way or another. In the US this number is about 95%. All this will benefit financial conglomerates: the cost of offices and salaries will significantly decrease.

Practice shows that large financial conglomerates stop cooperation with promising startups, switching to their own developments. In particular, the American financial holding JPMorgan Chase, which is part of the big four country, has introduced the cryptocurrency tied to the USD on its own blockchain. In 2017, many expected that financiers would pay attention to companies like Ripple, and start using their platforms.