Emerging Technology Trends in Banking

Technological innovations in the financial sector are creating new ways for consumers to interact with banks and retailers alike. Despite all the buzz surrounding the disruptive impact of new technologies like blockchain, cloud computing and biometrics, many argue that advancements in the field of Artificial Intelligence (AI) stand to have the most significant and immediate impact on relationships and interactions between financial institutions and their customers.

With its tremendous potential to improve efficiency and reduce costs, AI has emerged as a veritable game changer for the finance industry. Banks are already making moves to capitalise on the benefits of using AI enabled chatbots to perform a wide range of functions, including responding to customer queries, providing information on products and services and even performing banking transactions.

According to a June 2018 report from Juniper Research, entitled ‘Chatbots: Banking, Retail & Healthcare 2018-2023’, Chatbots are expected to save banks billions of dollars and countless hours in response and interaction times. In a recent interview with Banking Innovation, HSBC's digital payments head, however, Carolyn Criscitiello suggested that while the capabilities of chatbots are continually improving and expanding, they have yet to reach the level of sophistication offered by popular digital assistants, such as Amazon's Alexa, Google Home/Assistant and Apple's Siri.

Perhaps Criscitiello’s observations explain why many banks have been making moves to capitalise on the growing popularity of these tools by allowing customers to use these virtual assistants to perform basic functions like checking their balance, paying bills and soon transferring money, instantly, using voice commands. Virtually all of these AI enabled functions, however, have been plagued by security concerns that have tempered the enthusiasm with which they have been embraced by the financial sector. Financial institutions are rightly concerned by the risk that the data used by AI tools could get into the wrong hands, leaving customers vulnerable to being exploited by cybercriminals.

Both academic research and actual occurrences of theft have proven this risk to be a real possibility. A 2016 study conducted by the University of California, Berkley and Georgetown University found that it is possible to send hidden commands, undetectable to human ears, to virtual assistants. Cybercriminals could potentially exploit this vulnerability to instruct virtual assistants to conduct financial transactions, unbeknownst to the account holder.

These security concerns also are not limited to third party virtual assistants like Siri and Alexa. For example, even Zelle, a bank-to-bank transfer system that was developed by banks, for banks and was quickly embraced by many financial institutions, has suffered losses from cybercriminals who used it to steal from customers.

Still, the potential vulnerabilities of these systems should not be taken as signs of their incompatibility with the roles and functions of the finance industry. On the contrary, as customers become more and more accustomed to performing cash free transactions , it has become a matter of survival for banks and other financial institutions to find ways to integrate the technological advancements our customers want and need. Of course, the challenge for us will be to do so as quickly and efficiently as possible while continually building the robustness of our security features to guard against the attacks of cybercriminals and other new and emerging threats.

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