Evolution of Banking: How These 5 Factors Transformed the Industry

Banking nowadays is nothing like it used to be before – now, you don’t even need to go to a physical bank because you can update your information, transfer money, pay your bills and make purchases at the touch of your fingertips.

Clearly, the evolution in the financial sector happened right before our very eyes and that’s precisely fueled by these factors:

The GenZers

If you were born between 1996 and 2010, then you belong to the Generation Z demographic and which also means you can’t live without your phone.

You most likely have different social media apps installed on your cell phone, which is why you can’t afford to leave it at home.

Generation Z has always relied on their gadgets to accomplish different tasks

The truth is, more than updating your status or uploading photos, you use your smartphone to do almost anything, including accessing your account funds.

According to a Business Insider report, over 50 percent of this demographic in the United States turns to a digital wallet when buying at least once a month.

Because GenZers heavily rely on gadgets (59 percent use it for different tasks), banks need to provide services that are purely digital.

Digital Banking

As technology has shaped how things go, banks have also resorted to having an online presence to prioritize accessibility and convenience, thus cutting expenses that should have gone to physical branches.

There’s also the rise of neobanks, or those that are only digital, which do not only offer transparency, but also lower fees.

You can do online transfers and payments nowadays

According to Business Insider’s study, about 70 percent explained that they access their accounts primarily through mobile banking.

Online Mortgage Application

Almost everything is now done online so it’s not really shocking that applying for a mortgage can also happen in just a few types and clicks. There’s no doubt that housing loans are growing but what’s surprising is that 47 percent of customers would be OK seeking a mortgage online.

You don’t have to apply for a mortgage personally

Plus, lenders are quicker to process applications rather than the traditional ones. Plus, a faster turnaround would mean more consumers to attend to, thereby increasing efficiency.

A Shift in Regulations

Neobanks wouldn’t be able to operate without a go-signal from authorities, which means the evolution of banking also relies on certain people. In the United Kingdom, regulators have given licenses to 15 digital-only banks.

Blockchain

Blockchains are decentralized and distributed ledgers that ease record-keeping and banks are willing to shell out tons of money for this – institutions are making a $1.7-billion investment in this technology, the study found.