Virtual Banks Forge Ahead in Defining Banking’s Digital Future

bank notes, dollar, us dollars-941246.jpg

The banking landscape is undergoing a digital transformation, as traditional financial institutions (FIs) race to keep pace with evolving consumer preferences and technological advancements. 

Santander’s recent announcement of plans to launch its digital bank, Openbank, in the United States and Mexico in the second half of 2024 underscores the accelerating pace of this shift. 

Moreover, this move reflects broader trends shaping the financial sector, driven by changing customer expectations, technological innovations, and shifting market dynamics. 

The proliferation of smartphones and other digital devices, for instance, has empowered users to manage their finances anytime, anywhere, leading to a growing demand for digital banking services that offer speed, enhanced security, and personalized experiences. 

For banks, embracing digital technologies brings improvements in operational efficiency, cost reduction, and access to new customer segments, not to mention the opportunity to create new revenue streams.

Michael Haney, head of product strategy at Galileo Financial Technologies, discussed this digital shift in a recent interview with PYMNTS, highlighting three key trends: flexibility in customer-bank interactions, accessibility across multiple platforms, and the demand for personalized services tailored to individual needs.

“We are seeing an erosion of physical accounts into virtual ones that not only reduce the total cost of ownership for the bank, but also allow the unleashing of data and analytics that help personalize pricing, credit decision and marketing offers, and all kinds of recommendations,” Haney said.

Technologies Drive Transformation

Several key technologies, including artificial intelligence (AI) and machine learning (ML), are playing pivotal roles in driving the digital transformation of banks. 

Findings detailed in the April “Digital-First Banking Tracker® Series Report reveal that nearly three-quarters of finance leaders are leveraging AI technology across various functions, including fraud detection, risk management and automation. 

Furthermore, more than 40% of banking executives see AI’s potential to streamline customer onboarding, including know-your-customer (KYC) procedures, while 25% aim to improve customer experiences with AI.

Beyond personalized customer experiences, improving risk management and detecting fraud, AI and ML are being used to customize rewards and benefits based on individual customer profiles. 

“This remains a very hot space in terms of rewarding loyal customers and trying to increase customer satisfaction,” Haney said, with banks exploring innovative strategies, such as partnering with travel agencies to offer personalized services. 

Meanwhile, blockchain-based assets are enabling marginalized populations to overcome the identity barriers that limit their financial opportunities. This helps to fill the gaps where traditional banking systems, which often demand prerequisites such as minimum deposit sizes, credit history, and proof of address that many individuals cannot fulfill, fall short.

Keytom, a newly launched neobank centered on digital assets, stands out as a prime example this trend. The Dubai-based company provides access to cryptocurrency transactions and investment strategies, all while actively pursuing its mission to break down financial barriers and unify both fiat and crypto domains within an accessible framework for everyone.

“At its core, the company champions financial empowerment, positioning itself as the ‘one bank for all digital assets.’ Keytom’s vision lies in dismantling financial barriers and uniting fiat and crypto domains within a cohesive framework accessible to everyone,” the virtual bank said in a Tuesday (April 9) press release.

Image by: Pixabay

Shopping Cart

Media Kit

    Data Protection

    Personal Data (“Data”) submitted for Media Kit (“Media Kit”), and/or collected in the form of first name, last name, email address and other contact details may be used for the purposes of inviting you to future events and for reaching out to you with content which may be of interest to you. For these purposes, The Digital Banker will share the Data with our associate companies (including event and content sponsors) to promote their products and services. You will also be automatically subscribed as a user on www.thedigitalbanker.com. If you would like to opt-out, email us at [email protected].

    By clicking Submit, you acknowledge that you consent/ have sufficient informed consent to the collection, use and disclosure of Data as set out above.

    The Digital Banker Summit

    Moving on from FTX: is 2023 the year of CBDCs?

    Indonesia, Jakarta

    Thailand, Bangkok

    Philippines, Manila

    Contact Us

      Data Protection

      The information you provide will be held on our database and may be used to keep you informed of our and our associate companies’ products and for selected third party mailings. Please tick the box if you would prefer not to be contacted for these purposes:

      Request Nomination Pack

        Data Protection

        The information you provide will be held on our database and may be used to keep you informed of our and our associate companies’ products and for selected third party mailings. Please tick the box if you would prefer not to be contacted for these purposes:

        Registration Form

          Data Protection

          The information you provide will be held on our database and may be used to keep you informed of our and our associate companies’ products and for selected third party mailings. Please tick the box if you would prefer not to be contacted for these purposes:

          Registration Form

            Data Protection

            The information you provide will be held on our database and may be used to keep you informed of our and our associate companies’ products and for selected third party mailings. Please tick the box if you would prefer not to be contacted for these purposes:

            Registration Form

              Data Protection

              The information you provide will be held on our database and may be used to keep you informed of our and our associate companies’ products and for selected third party mailings. Please tick the box if you would prefer not to be contacted for these purposes:

              Registration Form

                Data Protection

                The information you provide will be held on our database and may be used to keep you informed of our and our associate companies’ products and for selected third party mailings. Please tick the box if you would prefer not to be contacted for these purposes:

                Registration Form

                  Data Protection

                  The information you provide will be held on our database and may be used to keep you informed of our and our associate companies’ products and for selected third party mailings. Please tick the box if you would prefer not to be contacted for these purposes:

                  The world’s preeminent Private Banks and Wealth Managers are demonstrating a committed drive in innovation, advisory, new products and services to meet the sophisticated needs of their clients.

                  COVID-19
                  Amid economic activity revival on the back of the Covid-19 vaccine program, organisations moving from business continuity plans to stable working environments, together with the slightest improvement in unemployment numbers, forced the world to adjust to new realities. Coming to terms with the “new normal”, global investors are now on the look-out for attractive and stable investment opportunities.

                  Needs of Private Wealth customers and families worldwide have drastically changed due to the pandemic and banks have had to accelerate efforts to deploy a multi-channel service strategy and safeguard clients’ businesses and wealth against negative impacts of economic uncertainly.

                  The Global Private Banking Innovation Awards will recognise the world’s best private banks, wealth managers and asset managers that are championing innovation across advisory, service, products, customer experience and more.

                  Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. 

                  Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum.

                  Request Nomination Pack

                  Error: Contact form not found.