Blockchain Technology in Investment Banking

Data storage is one of the prime requirements to manage an investment bank. Banks create multiple databases to store valuable information regarding the customers, transactions, and others. These databases play a critical role while completing any task. Banks are required to offer and obtain the needed data to facilitate a smooth transaction. All the counterparties require informational pieces on a regular basis. Managing huge databases becomes a troubling and expensive task for investment banks.

It is here that Blockchain can display immense potential for investment banks.

It can become a viable answer to all the database related issues faced by the banks. Blockchain database systems provide one platform for all the counterparties to access the required data. The highly secured access system keeps the databases protected too.

According to a report, Blockchain has been able to reduce the banking costs and increase savings up to 30%. Also, it is reported that investments in Blockchain efforts in capital markets will rise from $75 million in 2015 to a staggering $400 million by 2020.

The banks can integrate all the fragments of databases together and make their office processes much more cost-effective.

1. Lower reporting costs with transparent data optimization

The blockchain provides a single source for the data. The source offers a highly optimized quality of the data for the banks, which brings an incredible level of transparency in the financial reporting.

The verification of the data becomes much easier as the authorities, clients, and customers share the data at the same time. This way, the banks get to create financial reports without investing a huge amount on gathering and verifying the data.

2. Lower processing costs with efficient operations

Blockchain centralizes the whole operation of investment banks. The operations related to finding details of customers, connecting with clients and others take much lesser effort with the continuous availability of the required data. A single source provides all information about every function.

With that, banks get to manage the digital identities efficiently. Multiple branches can use the same source to understand customers and provide quick and easy services. By doing this, the banks get to save a lot of operational costs too.

3. Lower compliance costs with transparency

With traditional database systems, banks have to spend a huge amount of money in communicating information with all the counterparties. Banks need to gather data and audit them again and again to ensure the compliance in the functions.

These costs can also be reduced with blockchain. A single database system becomes a perfect solution to bring transparency and audit transactions conveniently. The whole process becomes visible to all the authorities. As a result, the costs of compliance reduce by 30 to 50 percent.

Other benefits

There are various other functions that an investment bank needs to manage. Some of the functions include middle office work, trade support, settlement, investigations, and clearance. It is obvious that all the mentioned functions require the availability of the right data at the right time.

Banks are required to gather, analyze and confirm the data before taking any action. Hence, the availability of a blockchain database system makes these functions much more cost-effective.

Recent reports have presented positive outcomes of the blockchain technology and thus, more investment banks are exploring to implement this database technology in their work.

Artificial Intelligence in the Banking Industry

Artificial Intelligence has taken the world by storm and has been advancing rapidly in recent times. It has shown a remarkable potential to augment human efforts and free them up from routine tasks so that they can focus on being better in strategizing and doing complex activities.

In today’s world, almost every aspect of life and business has the potential to be disrupted by AI. It is no wonder that the AI market is expected to surge past the hallowed $100 billion mark by 2025.

How will the banking sector be affected?

AI has had an effect on almost all the industrial sectors, and the banking sector is also one of them. Banks have started using AI for multiple purposes to make their institutions operate smoothly as AI bots can run all round the clock and do the jobs assigned to them flawlessly. The banking sector is using AI increasingly and so, here are 4 ways AI is impacting the banking industry.

1. Improved and Cost-Effective Customer Service

In today’s ever-growing corporate world, it is almost impossible for a human being to bear the burden of all the customers calling the bank’s support helpline. This is where AI plays an essential role.

Apart from being available to customers all round the clock, AI has drastically reduced the manpower and money required for customer service. This has majorly benefited the finance industry.

2. Better Management

Before the advent of AI, companies used to ask advice from bank experts as to how they can maximize profits and minimize taxes. However, it’s in the nature of humans to be imperfect, which is why the predictions were not correct mostly.

Now, customers who are looking for advice can directly ask the bank’s AI program about any questions related to their company. The AI-powered solution can provide a full report with all references and facts, thus helping both the bank and the company.

3. Know your future prospects and returns

With a targeted AI solution, you can keep getting continuous updates on various offers available and build on your current assets to increase your returns. Also, you don’t have to start from scratch as the AI will do all your work for you. Once you have an AI system in place, it will keep your account safe from market fluctuations.

4. Precise investment information and research

The finance sector is a volatile one, and many a time, there are crucial decisions that need to be made. In this case, it is but natural to choose the expert programming of an AI over human predictions and trust the AI’s continuous learning methods to forecast better.

If a bank has an AI systems in place, it can provide you with all the research and reference along with exact facts and figure to help you make the best possible decision. This makes AI an invaluable asset in the financial sector. Investment decisions are very crucial as customers may lose their trust over a bank in case the advisor makes a wrong decision.

Thus, AI has become a vital part of the financial sector and will continue to be, in the future. With so many benefits being derived from the industry it is natural that AI will find increased adoption in the months to come.

Mobile Banking Is On The Rise

Just a simple question to start. When did you last visit your bank? Most of you would be hard pressed remembering it. If today every activity is happening online then it is logical that banking can also be executed online. With the tremendous advancement in technology the mobile apps built for banking nowadays are very secure and up-to-date thus providing a hassle free banking experience.

Also the mobile banking apps have become very intuitive and easy to use compared to its earlier bulkier versions. A person who does not have any previous experience in operating a technical device can also easily transact using a mobile app. There are many other benefits of mobile apps which have drastically transformed the banking sector and made banking immensely easy. Some of them are enumerated below:

1) No waiting in queues

If you are one of those people whose first work of the day was to visit a bank, then you would whole heartedly appreciate how banking apps have changed your life. The days of large queues outside a bank are over. By just clicking on a few icons your banking work is done within seconds with the help of a mobile banking app.

2) Tremendous convenience to consumers

Most of the banks have their working hours between 9am and 5pm and that is also the time people go to offices for work. Previously if a person had some work in the bank then he would had to take the day off from work or had to leave early, but with the advent of mobile apps this scenario has completely vanished. With the help of his bank’s mobile app he can transact anywhere in the world and anytime of the day.

3) Immediate transfers

Normally in India it takes three days to clear a cheque issued from a different bank. This led to tremendous wastage of time and resources. Now with the help of a banking app, a businessman can transfer money immediately to his supplier or any other person in just few seconds.

How is technology driving this radical shift?

A well deployed banking solution needs to take care of universal UI/UX experience for all bank customers. Also a secure platform needs to be provided in order that customers get peace of mind by using banking apps on their mobile. Disruptive technologies like e-wallets, BHIM app, and UPI are further expanding the reach and coverage of banking

Additionally the servicing front too has received a fillip with technology offerings like cloud deployment, mobile apps, big data, AI, and IoT. These are largely driving the business strategy of private and public banks alike.

Banks which were thinking of opening thousands of branches and ATMs just two years back are now giving more importance to their banking websites and apps and are brainstorming to bring in new apps with innovative technologies which would rapidly alter the scenario further. The leap of technology has already created virtual banks and in the future a new physical bank would be a rarity.