Banking innovation season is in full swing. More and banks are competing to seewho can modernize client relationships more and how to make contact even safer. The fight for domination is taking place everywhere, in both audio and video channels. So, who will win? Today, this is difficult to predict. Everything could turn remotely confirmed identity, or so-called online verification via biometrics, voice transaction authorization, or the shape of the face or fingerprint, upside down at any moment.
Online verification is the use of the latest technologies in the process of checking the identity of a bank client. Such verification is faster than a more traditional visit to the bank branch and can be done virtually anywhere. The electronic identity verification process takes place in several stages, one of which is shown in the following diagram.
After the completion of the identification process (if the bank is no longer "on board" with us) we can almost immediately make use of the expected product, e.g. a new bank account or loan. Remote verification can also be performed with the support of biometrics, wherein the system compares clients' specific facial features with the facial shape in their supplied ID photo. In addition, we can give our signature using a touch screen, which will then be compared with that on the ID. Identity verification is also an opportunity to obtain a voice or fingerprint sample which can later be used to authorize transactions. In a word, the possibility of remote verification gives us what was previously available only in bank branches. With the support of this process, we are able to finalize almost any banking operation. Quickly, comfortably and without a trip to the bank.
In practice, the remote digital user verification process is the beginning of further, fully online cooperation, from the sale through post-sales service. The client does not have to copy data and fill out forms himself, nor does he make mistakes which can extend the time required for a service. All of the formalities are handled using a computer or phone. The transfer of user documents is done in a safe manner and to guarantee the protection of personal data. Another advantage of this process is the elimination of the verifying money transfer.
The introduction of biometric verification will cause the smartphone – the tool we use to prove that we are who we claim to be – to become the main instrument used for paying. Even today, some banks allow us to log onto our account by simply pressing our finger to the screen (ING, Millennium Bank and mBank) or saying a few words into the microphone (voice login in Smart Bank). If we start to authorize transactions biometrically...life will be beautiful.
Is this a song of the future? No. Bank clients are increasingly willing to use electronic banking at the cost of traditional branch visits. Now, the average bank account owner has approximately 17 interactions on his bank account per month. This includes as many as 7 visits to just to check his account balance or perform a transaction. Another 4 are for consultant support via the hotline, and 3 are visits to the bank website made using a smartphone or tablet. The remaining are contact through social media channels, the website or ATMs. The average bank client comes into contact with a bank only once a month . According to the World Bank data, outlet density in EU countries has fallen from 33 to 28 branches (as measured by number of branches for each 100 thousand inhabitants) .
One of the main reasons for this is the growing importance of self-service access channels. More and more clients are willing to use electronic tools and order various services via internet banking. This trend is very clearly visible in developed markets as well.
The development of virtual branches using video channels allows for the implementation of processes such as online legitimation. This process significantly simplifies and further accelerates client acquisition, without the need for making inconvenient trips to a branch. Through the use of new technologies, bank branch visits will actually become unnecessary.
Client preferences require the introduction of more useful and modern forms of communication and service. Their expectations include fewer visits to physical bank branches. However, this should not be surprising – video conferencing gives you easier and more convenient access to an advisor at any time and from anywhere. We must also bear in mind the fact that in 2025, global economic strength will be defined by the so-called millennials. Generation Y appreciates online contact more than anyone has before them . And Generation Z, for whom the real and virtual worlds are on the same plane, will also soon be on the market.