Mortgage Software Solutions Blog

2018 Changes in Banking Technology Part II

blog pic 3Finance customers turn to mobile banking technology.

New technology continues to change the banking landscape.

For mortgage lenders, finance technology or “fintech” startups are competing to attract lending clients.

Smartphone-obsessed customers are more mobile than ever and the number of banking platforms has exploded. With 46% of consumers using only digital channels for their banking, the way that customers handle their finances is taking a huge shift.

Here are 3 more ways that new technology is changing the banking industry in 2018.

  1. Cybersecurity

Cybersecurity in the financial industry is experiencing a worldwide crackdown in response to infamous missteps in 2017.

Last year was rough. Large businesses from Uber to Equifax came clean with the public about record-breaking customer data breaches.

As a result, new regulations concerning finance-related cybersecurity have made it onto the books in the United States, Europe, and the United Kingdom. Stricter regulations even include naming and shaming in the public forum. For example, starting in 2018 the Financial Conduct Authority requires UK banks to publish data on how many complaints and security breaches they have encountered throughout the year.

Formerly held accountable by regulatory bodies within the banking industry, now financial institutions will be facing not only federal law but public opinion. With leaders like the EU, the UK, and the US taking the lead, other world markets are sure to follow.

High-tech options in identification and recognition are hitting the market as a way to shore up security. Biometric security and voice verification software are in development and beta testing. The new measuring stick for basic security begins at multi-factor authentication.

Mortgage lenders at any level would be smart to take notice and sort out their cybersecurity issues. The only other option is to risk having their name added to the growing list of internationally untrustworthy companies in the eyes of consumers.

  1. Mobile Investing

Another new technology on the market takes investment consultations out of the local branch and drops it right into the investor’s pocket.

A full 82% of 18 to 24-year-old smartphone owners say they use mobile banking exclusively. 

Feeding the demand for putting banking applications onto mobile devices like smartphones and tablets, fintech is making lending and investing more accessible than ever.

This new wave of mobile finance is letting millennial do-it-yourselfers have all the control by using plain language and visuals to explain financial terms. Bankers are replaced by explanatory screens and animations. Investment apps even let new customers dip their toes in the investing game by allowing customers to have a “practice run” before dealing with actual money.

Small-scale investment companies are reshaping the barriers to entry by allowing new investors to get in the game for as little as £250 in the UK. These game changers are coming about due to aims of open banking legislation strategies for reducing monopolies.

This new family of mobile investing apps offers greater control than traditional banks over their mobile-based portfolios, even allowing customers to pick and choose investment baskets based on trending labels like “socially responsible tech”.

  1. New Technologies

Beyond cybersecurity and innovation in mobile investing technology, there is a host of newly-developed niche finance technologies hitting the market.

Robo investing automates the risk appetite assessment process.

Full integration of voice assistants are popping up. Capital One partner Alexa can now tell customers their account balances and spending habits after a night out.

Though historically skeptical towards bitcoin and cryptocurrency, credit giant Mastercard changed their tune in 2018 and announced open support for virtual currency in the Asian-Pacific market.

It’s too early to predict which of these new technologies will have staying power and which ones just won’t stick, but they all have one thing in common. They all work on the basis of a hybrid platform that combines human and computer-based tools to carry out financial services.

These new integrations of technology into the banking world are already changing the way that consumers approach banking.

With 2018 is primed to be the year that tech saturates the finance industry, mortgage lenders and other traditional finance institutions have no choice but to take notice.

Join us at the cutting edge of technology with regulation-compliant cyber security, remote device access, and more. ABT equips mortgage lenders with the tools for success in a digital world.

Image: Unsplash

Topics: mortgage regulations mobile technology mortgage industry partnerships Consumer Finance Protection Bureau Compliance for Mortgage Companies Compliance Audit job opportunity Trump Administration Mortgage Lending

What Technology Is Changing In Banking For 2018

blog pic 4In the future, financial information and programming will be increasingly available on-the-go.

The old days of purely brick-and-mortar banks are over.

Mobile banking is the preferred platform as global smartphone use skyrockets and our preference for handheld interaction grows.

In 2011 only 10% of the world’s population used a smartphone. By 2018, that number has reached over 36% penetration.

From traditional commercial banks to finance technology or “fintech” startups, the banking industry is competing in an all-out sprint towards digital progress.

Here are 4 ways that technology is changing the banking industry in 2018.

  1. Open Banking

Open banking is a phenomenon being pushed by regulatory bodies around the world.

Lawmakers in the EU, UK, and the US have all passed legislation that takes personal financial data out of the hands of the banks and returns control to consumers.

The EU’s Payment Services Directives (PSD 2007 and PSD2 2015) will be fully implemented this year.

Together the PSDs regulate financial service providers by requiring transparency about consumer rights and the banks’ obligations to the public. They also require banks to free up customer data for third party access, limiting the power of the bank that gathered it.

The EU regulations coincide with the “Open Banking revolution” in the United Kingdom that intends to make banking more competitive for increased consumer protection. The UK also made it mandatory for all banks to provide third-party access to customer financial data using open API technology at the start of 2018.

In the wake of the Equifax data breach on the other side of the Atlantic, the United States made their move towards stricter regulations beginning in 2017 with the state of New York. US laws are focused on cybersecurity and consumer protection via speedy cyber attack reporting and increased government oversight of consumer data mishandling.

The proximity of these launch dates mean that traditional banks around the world face new technology-based limitations. Open banking and cyber security requirements leave the door open for tech-savvy challengers with a spotless reputation for safeguarding the public.

  1. RegTech

Another technology changing global banking in 2018 is regulation technology or “RegTech”.

RegTech is the umbrella term for software tools specifically designed to streamline regulatory compliance.

In the EU, RegTech has been using guidelines from the 2004 and 2011 Markets in Financial Instruments Directives (MiFID) as well as the General Data Protection Regulation (GDPR) of 2014.

Newly developed RegTech takes new 2018 regulations into account and eliminates duplication issues and insufficient data storage signposting.

Due to increased regulation, the adoption of these programs across the industry will determine which finance organizations move ahead and which ones get stuck hitting every legal bump in the road.

If implemented well, RegTech has the potential to significantly reduce risk, speed up compliance management, and control bank costs despite increased accountability.

  1. Robo Advice

“Robo advice” is the term for technology that does traditionally human jobs in investment banking.

In the past, investment managers evaluated a customer’s financial situation, communicated investment options, assessed risk appetite, handled portfolios according to client preferences, and relayed information about performance back to the investor.

Robo advice is the software and algorithms that provide these services digitally and accessibly on mobile devices like smartphones and tablets.

Millennials aged 22-37 prefer to work with apps and digital information over commercial banks. The demographic has a do-it-yourself attitude and shows an aversion to traditional banking institutions that have steered them into crushing student debt.

In fact, 75% of American millennials report trusting a financial product from a fintech company. Almost half of millennials in the US with investments report being aware of robo-advisors, while a full 11% currently use a robo-advisor exclusively.

With a frictionless user experience, robo advice may become the new norm.

  1. New Technology

In the UK, financial services newcomers are edging out traditional banks. Startup lenders like Iwoca in the UK are touted as the “future of small business lending” by using software algorithms to make credit decisions and having quick loan turnaround thanks to fintech.

By using all-digital or hybrid platforms combining human and algorithmic tools to reach customers, other digitally-native finance startups are slated to follow their lead.

Whether it’s anti-monopoly Open Banking APIs, intelligent RegTech software to handle compliance, or the growing preference for robo advice over human interaction, technology is making huge waves in the global banking industry this year.

As the digitally-native generations grow, traditional financial institutions scramble to expand their digital offerings while fintech startups flourish and join the market.

Join us at the cutting edge of technology with regulation-compliant cyber security, remote device access, and more. ABT equips mortgage lenders with the tools for success in a digital world.

Image: Visual Hunt

Topics: millennials cloud storage mortgage business mortgage regulations mobile technology mortgage industry Consumer Finance Protection Bureau Compliance Audit job opportunity cloud-based data Trump Administration Housing Market Mortgage Lending