Bank 4.0: where are people in this new revolution?

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The pandemic has really turned many practical items and services into absolute necessities. Banking transactions that primarily involved people visiting physical outlets are now attracting digital traffic and inquiries. To give you some perspective, the global value of digital transactions during the pandemic (2020) was around $5.2 trillion.

In the evolution of the BFSI sector, we are today at the dawn of what we call Bank 4.0. Similar to the buzzword Industry 4.0, which is marked by the arrival and influence of emerging technologies such as artificial intelligence (AI), machine learning (ML), data science, cloud computing, cybersecurity, etc., Banking 4.0 also sees the emergence of these new – aging and in-demand technologies in its operations and infrastructure.

So what is Banking 4.0? More importantly, do humans have a place there? Let’s find out.

Evolution of the bank
● Banking 1.0: the conventional banking model that involved brick-and-mortar outlets and branches with customers experiencing a very analog mode of transactions.

● Banking 2.0: From a need for a cashier or clerk, Banking 2.0 ushered in the world of self-service banking with the early adoption of the Internet.

● Bank 3.0: Adding a layer to self-service banking, this era uses digital technologies and devices such as wearable gadgets and apps to deliver a whole new range of banking experiences. It is also the time of the personalized bank.

What is Bank 4.0?
Fully digital, mobile first and less overhead is what would define Banking 4.0. For the uninitiated, Brett King’s book is even titled Banking Everywhere, never in a bank. This means that customers will no longer benefit from generic products that follow a one-size-fits-all approach, but from more personalized services and offers tailored to their individual demands and expectations.

Imagine the most personalized credit system that gives you buy-it-now and pay-later options based on your credit score, transaction and purchase history, salary range and more. Or, insurance premium options based on your history and driving record.

It also means a more proactive approach to solving real-world problems and resolving conflicts quickly through increased use of AI, ML and data science. Digital first will no longer be on paper at the political level, but also in actions and implementations. This translates to BFSI seeing more applications of AI not only to optimize customer experiences, but also to make their business processes, systems, and workflows more airtight.

Where are humans in this revolution?
While at first glance it might seem that there is no place for humans in this ecosystem, it is in fact the opposite. When typewriters were replaced by first-generation computers, people were afraid that their jobs were at stake. A similar situation occurred when spreadsheets arrived. The underlying point here is that emerging technologies have created more niche jobs versus destroying existing ones. This has forced people to transform and learn new skills, which prove to be lucrative and beneficial in the longer term.

Read also | Data and Analytics in Banking 4.0: the main differentiators

Regarding Banking 4.0, the ecosystem would need professionals who have skills and expertise in

● Data science to uncover crucial insights into customers and operations
● Build and deploy AI/ML models and implement automation
● Design cloud and large-scale banking services
● Create a cybersecurity environment for customers by using airtight cybersecurity measures and practices
● Using blockchain to secure and protect data through decentralized identity and other privacy mechanisms.

Additionally, human capital is needed so that organizations can seamlessly transition from legacy (and legacy) systems to advanced systems, adapting systems for smooth operation and introducing a digital-first culture. All of this will be a herculean task without sufficient human involvement.

Final Thoughts
We are currently going through a period of rapid change, which leads us to reflect on the place that the skills and competences of our workforce should occupy in this evolution. With the changing role of humans, are we sufficiently prepared to take on new roles and responsibilities? Are organizations planning to transform their existing talent pools? Are we ready to define tomorrow’s banking experiences today?

Written by: – ​​Siddharth Pant, Head of Data Science (Academics and Operations), UNext Learning

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