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Digital banking 20 Nov 2019

Five digital transformation trends in banking we’ve seen in 2019

What were the hottest digital transformation trends in banking in 2019? Which ones should we keep an eye on in 2020? The banking sector’s interest in the latest developments in cyber security, computing or gamification grows day by day. For disciplines such as ‘pentesting’, quantum computing or development with the Unity engine, the future looks bright.

Technology and banking want to walk hand in hand. For a number of years now, new fintech challengers have been coming up with new proposals and taking every link of the banking value chain to the next level, from payments and loans to financial inclusion, cybersecurity and everything in between.

According to ‘Fintech: the experience so far’ – a recent report by the World Bank and the International Monetary Fund (IMF) -developments ranging from artificial intelligence to mobile applications are “providing new solutions that seek to increase efficiency , accessibility and security of financial services provision.” In 2017, says the IMF, fintech firms accounted for almost 20 percent of the total $90 billion valuation of new IPO’s (at launch) by global financial sector firms. These fintech firms focus on everything from blockchain, to Artificial Intelligence to payments and crypto-currencies.

Banks should not miss out on the opportunity to leverage technology to grow their business and improve their relationship with customers. In its report entitled ‘Radar of Innovation and Technology‘, BBVA Next Technologies discusses some of the most relevant developments that are yet to come in the digital transformation in banking.

Quantum computing

 Quantum computing and banking are starting to take their first steps together. Quantum technologies promise to bring a new data processing model, capable of performing in minutes calculations that would take today’s most advanced computers months. Based on qubits or quantum bits, this technology can help the financial sector find faster answers for everything related to risk and investment assessments. It will also have a huge impact on cyber security: preventing attacks from quantum computers will require developing new barriers, algorithms and types of cryptographies.

However, quantum technology is still in its infancy and only Google, IBM, Intel and Microsoft have managed to make substantial progress. Regardless, BBVA and CSIC recently signed a partnership agreement to gauge the potential of this new technology and explore the opportunities that quantum computing can bring to the banking sector.

Homomorphic encryption

Data transfer securitization via secret keys and cryptographic encryptions is an essential part of a company’s business, also for those in the banking sector. Homomorphic encryption is a step forward in this field. This new technology allows reading and handling encrypted data without having to decrypt it beforehand. Why should banks keep an eye on this trend? Companies send, receive and handle data every hour, many times encrypted. This new encryption technology eliminates the possibility of breach or misuse of the data when received (and decrypted) and sent again (re-encrypted). Waiving the need for access to secret keys, the technology increases security in data transfers and eliminates potential damages.

Innovation in ‘pentesting’

A penetration test, or pen test, is a simulated cyber attack against a computer system by a company’s security experts to check for exploitable vulnerabilities and fix them to prevent external attacks. In the IT world this is also known as ethical hacking, since it’s the company’s IT experts who perform the test on machines, much like banking authorities perform stress tests on banks, to improve their resilience.

What’s new about Intelligent Automatic Pentesting Assurance is that these tests are carried out automatically during software installation processes and while the safety networks are being created. This automation is enabled by machine learning algorithms. As security threats become more sophisticated, machine learning algorithms are emerging as a more efficient defense tool because they can adapt more quickly to circumstances that nobody was aware of before. The banking sector is always on the lookout for new developments to improve their networks and remain on the cutting edge of security.


Unity is a platform for the creation of 3D, virtual reality and augmented reality content in real time, hugely popular among the gamer community. But the Unity platform and the whole Unity development community -individuals and companies – are open to creating of tools and content through a software development kit (SDK) for other sectors, such as the automobile, marketing or film industries. The banking sector, as BBVA Next Technologies’ report notes, must keep an eye on Unity because it is “the most popular tool for tackling projects in all areas of activity.” In addition, Unity’s developer community brings together the best talent and games, and experiences made with Unity reached more than 3 billion devices worldwide, according to Unity’s website. Unity’s roster of partners includes technology and entertainment giants such as Apple, Sony, Microsoft, Google and Intel.

Native AR

Augmented reality came to our lives as an entertainment experience. Thanks to smartphones we have been able to hunt Pokemons or gaze at the stars and constellations in a whole different way. In recent years the technology’s field of application has been steadily expanding and has become a helpful tool in activities such as home searching (BBVA launched the app Valora View) or in room measurement. Google and Apple have developed their own tools (ARcore and ARkit, respectively) to start creating experiences in all areas.

As the Next Technologies report notes, augmented reality is making progress at an impressive pace: “It has evolved by bounds and leaps in just two years, adding features such as the detection of ambient light or planes at different angles of inclination. “ Although there’s still a pivotal milestone that needs to be achieved: integrating augmented reality into ‘apps’ not exclusively developed for this purpose, without having to download another ‘app’. The so-called native AR. No sector that relies on ‘smartphone’ interaction in any significant manner can afford to lose sight of the possibilities and the development of augmented reality.

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