The future of banking is moving to one goal “invisible banking” is a combination of recent technological advancements such as artificial intelligence, analytics and personal financial management software. The goal is to “get all the hassle away, so banking is becoming invisible,” said Benoit Legrand, chief innovation officer at ING. You don’t have to think about banking like this.
Key Technologies:
- Internet of things
- It is the interconnection of everyday devices and objects to the internet, allowing them to collect and exchange data. There have been efforts made in the past such as Google Glass have failed to work, but there have new improvements made in the Netherlands. Using the location in your phone it can track where you entered and exited the train and you will be automatically charged. Alan McIntyre, senior managing director for banking at Accenture says “Whether it is tapping a ring that you wear or facial recognition, the payment will become more seamless… The idea of taking the card out of the wallet will seem archaic. What you think of as transactional banking will disappear” by 2025 and expects the use of biometrics and wearables for payments to replace cards and phones entirely.
- Voice banking
- Along with those changes brought on by wearable technology, speaking to Siri, Alexa, a car or phone app will be used more and more for financial tasks like payments and on-demand loans. Benoit Legrand, Chief Innovation Officer of ING, believes voice banking through machines is where the industry is going because “Human beings are lazy. First, we needed to go to the bank to get cash. Now you can open your computer and do a couple of things, you can tap your phone and pay. The next stage is to say, Alexa, transfer two euros to my mom. This is the next step in laziness.”
- Financial wellness
- In five years, it looks like the digital banking component of personal financial management will be even more fluid and simple. There are two ways this may go, according to Kristen Berman, a behavioral scientist and co-founder of Irrational Labs and Common Cents Lab. Either customers are given the skills to use methods to make better decisions and most of the work is done for them, or technology improves, and people begin to trust it. For instance, if a consumer signs up for a goal, like taking a trip at the end of the year, the bank will automatically withdraw money from their checking account and deposit it into a vacation account based on their income and expenses.
Analysis
The future of banking is increasingly shifting towards an “invisible” paradigm, where banking services seamlessly integrate into consumers’ daily lives without the traditional interaction with bank branches or even mobile apps. The Internet of Things plays a pivotal role in this shift. For example, connected devices can automate payments; your car could pay for fuel upon refilling or your refrigerator might order and pay for groceries when supplies run low. Voice banking further elevates this experience. Instead of manual inputs, voice-activated commands through devices like Amazon’s Alexa or Google Home could facilitate bill payments, account inquiries, or even investment decisions. This voice-activated shift not only provides convenience but also makes banking accessible for those with physical or visual impairments. Meanwhile, as banks gather more data, there’s a growing emphasis on “financial wellness”. This means banks proactively offering insights, advice, or automated solutions to ensure customers are fiscally healthy. Think of devices that alert users about potential overspending or suggest savings strategies based on spending patterns. While this invisible banking model promises unparalleled convenience, it simultaneously poses challenges, especially in data privacy and security. Balancing this convenience with trust will be pivotal for the successful evolution of the banking sector.
Crosman, Penny. “The Rise of the Invisible Bank.” Banking 2025, 5 Jan. 2020, www.americanbanker.com/news/the-rise-of-the-invisible-bank.
