Impact of Financial Technology on Retail Bank Operations

Individual coursework

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................2
Critically evaluate how financial technology is changing retail bank operations.......................2
Describing baking firm theories that help in future of retail banking.........................................5
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
In the recent times, it has been identified that with a rapid increase in digitization,
technologies have gained their importance and this in turn causes positive impact over the
banking industry. Moreover, there are range of examples used by banking industry in order to
improve the overall performance and retain customers which include digital lending and mobile
banking, insurance, trading etc. Thus, financial technology i.e. Fintech is being massively
employed to assists diverse sectors of an economy as well as society. Further, the present study
also shed a light upon different technologies used by banking industry in order to improve their
operations. This in turn helps a business to gain a strong competitive advantage and causes
positive impact over the business performance. The report will critically evaluate how financial
technology is changing the retail banking operations and along with this, with the help of
theories of a banking firm, future of retail banking is affected.
Critically evaluate how financial technology is changing retail bank operations
Financial technology has completely transformed the art of providing best class services
to the customers by convergence of both finance and technology that also change the future
response. Thus, it can be stated that FinTech has already started revolutionary banking and it is
transforming the entire banking system from a branch specific process to a various different
digital channel like online, social and mobile banking. This is evolved in 21st century where
entire business is depending upon advance technology so that better financial service can
provide. This in turn also reflected that it helps to improve the customer service and raise the
business service as well.
There are lists of technology which is used by the retail banking industry which in turn
reflected that it is changing the financial industry. Thus, these are as mentioned below:
Smart Chip technology: It is an ATM cards which have significantly assists in
minimizing the financial loss that might be occur in case of any mishaps. This is related to EMV
technology that is embedded in chip and with the help of one-time password for each transaction,
a customer can withdraw the money. Apart from this, the code is valid only for one transaction
and also increases the security (What is Fintech and how it has impacted banking? 2021).
However, it has been critically valuated that if an individual forgot pin, then it causes

unnecessary hassles and trouble. Though, bankers constantly looking for ways to overcome
thefts and frauds in order to reduce the chances of theft. Along with this, as compared to smart
chip, the magnetic stripe technology uses same pin for all transaction and this in turn making it
quite vulnerable to frauds as well.
Biometric sensor: It is another important Fintech which helps to provide effective
transactions to their customers and also this technology simply eliminates the need to carry cards
and not even need to remember pin as well. Beside its convenience, it has been analysed that
these advancements make ATM secure than ever which will be able to access account without
any password. It is so because it uses integrated mobile application, fingerprints sensor and eye
recognition in order to determine account’s owner (Palmié and et.al., 2020). However, on the
critically aspect, it has been identified that this technology might cause an error when any its
system does not work. Thus, it has been identified that with the change in advance technology,
there is a need to provide those facilities to their customers but it also has many negative effects
which should also be considered.
Artificial Intelligence: It has become one of the integral part of a financial technology
services and it is mainly used for fraud detection and generates alerts whenever any fraudulent
transaction occurred. By considering the negative aspect, it has been identified that time of
detection of attacks is becoming quite difficult when attack become sophisticated as day passes.
This in turn consume lot of time and money where chances of losing customer data increases.
That is why, to minimize such issues, AI is introduced which assists to improve the banking
operations by complying with different AI technology (Coetzee, 2018). Thus, it can be stated
that with the help of AI, banking industry is able to save time and money, along with this,
chances of frauds also decrease as the years passes.
Mobile Banking: The increase use of smartphones which has forced banks to provide
mobile banking facilities to the customer as per their convenience. That is why, almost each
individual have their own bank application which provide complete details regarding to their
accounts. Thus, it reflected that such application provides quick access to the funds and as a
result, users can perform different banking function like quick bills, check deposit, account
balance. On critically note, it has been identified that due to server down, customer do not take
any advantage which leads to delay the entire services. Overall, it can be stated that with the help