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Digital banking 09 Jul 2018

'Chatbots', APIs, biometrics ... banking everywhere is becoming a reality

The future of the financial sector lies in its seamless integration into all sorts of devices. Biometrics, APIs and chatbots… there is mounting evidence that we might be in the early stages of the new era of  everywhere banking.

Monte dei Paschi di Siena, for many the world’s first bank, still in existence today, was founded in 1472 in Tuscany. Today, more than five centuries later, the banking industry faces an unprecedented revolution, enabled and exponentially accelerated by technology.

While the internet and mobile telephony brought on a tectonic shift in terms of access to financial transactions, the level of change is right around the corner will on a whole new scale.

Banking everywhere is the focal topic of "Bank 4.0: Banking everywhere, never at the bank", Brett King’s latest book, which will go on sale next August. Here, King, a leading voice in the financial impact of new technologies, takes a look at the future of banking, a future where financial services are everywhere, embedded into all sorts of objects, no longer confined to very specific devices and locations.

What technologies will power these new financial services?

Many agree that the world is heading towards a brave new cashless future, where credit cards – which also marked the beginning of a new era in banking when they first launched in the 1960s - will be rendered obsolete by emerging technologies that are already beginning to shape a new financial ecosystem, with digital payments and identities managed by 'blockchain' technologies.

Financial transactions will take place in environments that we can hardly imagine today, such as self-driving cars, thanks to the ascent of the Internet of Things. Signatures will be a thing of the past: advances in biometrics will result in the mass adoption of fingerprint, selfie, voice and iris recognition technologies to verify users’ identities.

While we may still have to wait a bit to start paying from our cars without having to tap a smartphone or pull out our wallet, other possibilities of banking everywhere are already here.

The future that is already here

The use of biometrics is already becoming a reality. BBVA’s 'Alta Inmediata' service, already allows prospective customers to open a bank account by just submitting a selfie via their smartphone and taking a video call. BBVA has also rolled out Samsung Pass, the Korean giant’s identity management as-a-service solution that integrates advanced iris scanning technologies, to deliver a faster, improved and more secure user experience.

Thousands of people at BBVA’s headquarters in Madrid use facial recognition system to pay for their meals at the corporate canteens and cafeterias. All users need to do is to download an 'app', toggle their smartphone’s bluetooth and location settings on, and stare at a camera for the system to verify their identity and process the charge.

"These collaborative ecosystems, pivotal for the development of everywhere banking, are enabled through the use of APIs"

Another biometric indicator increasingly used in banking is voice. Atom, the UK’s first mobile-only bank, in which BBVA holds a stake of about 39%, offers a combination of facial recognition, password login and voice recognition technologies to verify users' identities prior to authorizing a transaction. The increasing popularity of smart speakers (according to data from consulting firm Canalys, global sales increased fivefold in 2017 compared to 2016) could prove the tipping point for the mass adoption of voice-activated services.

Optimize resources

Chatbots are also already an important element in the relationship between banks and consumers. Powered by 'big data' and enhanced by artificial intelligence, these tools allow banks to offer a better customer experience and optimize their resources in a new business environment where branch visits will become increasingly rare.

BBVA’s chatbot, the first one rolled out by any Spanish financial institution, allows users to perform a growing range of transactions, including money transfers through instant messaging applications like Facebook Messenger or WhatsApp.

New business models are therefore already being applied, where companies from very different sectors and backgrounds collaborate to put out the best services. These collaborative ecosystems, pivotal for the development of everywhere banking, are enabled through the use of APIs (Application Programming Interface), tools that allow different systems to talk to each other.

BBVA was quick to realize the importance of collaboration for the future of banking, and committed to its vision by launching its own BBVA API_Market. With the APIs available on this platform, companies, 'startups' and developers can, subject to customer approval, access and integrate their banking data in their applications to offer new services.

The BBVA API_Market is a pivotal tool in BBVA’s efforts to promote open banking, in line with the requirements set out by European Directive PSD2, which seeks to boost competition in the sector. The objective is to contribute to building an innovative ecosystem that creates a new generation of digital experiences for customers.