28 July 2014

Digitalised Banking

Nanda Kumar - SunTec

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Trust me, I’m a hologram

26 March 2014  |  1753 views  |  0

Whilst the telecommunications industry tackles the challenges of delivering secure digital services to its customers, banks are going one step further to enhance the banking experience.

When it comes to online financial transactions in particular, simplicity, convenience and functionality are often sacrificed for increased security. Despite efforts, mainly by governments, to reduce the dependency on cash, most people outside the most affluent developed nations still prefer it.

The ability to manage and provide cash to customers is still a primary task of banks and they have gone to extraordinary lengths to roll out automated teller machines (ATMs) around the globe. Dispensing cash still remains a profitable business and enhances loyalty of customers. Cash withdrawals can be made from any ATM and this facility has proved to be the death knell of travellers’ cheques and costly foreign exchange dealings.

But convenience has come at a price. ATM skimmers, stolen ATM cards and customers being forced into withdrawing funds from ATMs at knifepoint are common occurrences. Yet, the sheer convenience and multitude of ATMs has changed the way banks operate and their extensive branch networks have been sacrificed to cut costs. This has led them to look at ways to improve the functionality and security of ATM transactions.

Banks, like telcos vs over the top players(OTT), have to compete with third party e-wallet players like paypal, google, apple etc., mainly offering digital or internet based offerings. They are even implementing holographic interface ATMs that offer personalized holograms that interact to customers voice and gestures.

While the holographic interface offers a new customer interaction, the advanced technology also provides immense scope for ATM security. Although the display appears in 3D and in mid-air, the viewing angle is 20 degrees away from the axis and 45 degrees from the plate. This means that the people standing around the machine are unable to see directly into the screen.

Its touchless system eliminates the need of having physical contact with the keys or screenthus offering higher standards of hygiene. Most ATM users familiar with smartphone interfaces will find the 3D ATM technology has similar features.

Banks in Taiwan are extending their reach with ‘portable’ branches that are positioned to test a new market or provide extra coverage for things like events. These are walk-in kiosks that have video-conferencing facilities directed to a staff member at a call centre, ATMs and interactive screens that offer a range of banking services including personal and home loans.

As we hurtle towards being a cashless society things may change radically and the mobile device is likely to become the holder or wallet of any virtual currency. That will demand a new range of security measures, most likely around biometrics and public key encryption.

Voice recognition is already being used by banks in the USA and, in light of news that security agencies use it to target suspects, will certainly grow in appeal. But if virtual banks start to grow, what will happen to the ‘bricks & mortar’ banks that fail to make the shift

The exact same decision plagues the telecoms industry in the face of new digital services and the perceived threat from OTT players, and provides a common denominator for both industry sectors. The role of banks will likely become one of being the ‘trusted partner’ helping customers to manage and spend their money wisely and provide the seamless and secure payment mechanism that will allow that.

They may even resort to ‘printing’ their own digital money á la Bitcoin, offering a more sustainable and less-sporadic currency backed by real money plus the security of being regulated and having to hold statutory deposits.

It would seem that if telcos and banks could work more closely together they could stave off the onslaught of the new digital ‘outsiders’, but if history repeats itself, that seems highly unlikely and the battle lines will be drawn on multiple fronts.

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Nanda Kumar

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CEO

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SunTec

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Trivandrum

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