Opening a savings account is often the first step in the financial journey of any Indian citizen. Several trends in the banking sector are affecting the way Indians bank and save. Read on to know the evolving features and trends that will define the future of savings accounts.
Seven evolving features and trends that are defining the future of savings accounts:
- Customers are adapting to digital banking tools like mobile banking apps: Almost every scheduled Indian bank has a dedicated mobile banking app today. Banks are focusing heavily on digital banking services like net banking and mobile banking to help their customers access all banking services. Online money transfer options like UPI (unified payments interface) and NEFT (national electronic payments interface) have made it extremely easy for customers to transfer money online. These digital banking tools will define banking in India in the coming years.
- Open banking is leveraging data sharing to help customers derive financial insights: Banks are now employing a concept called open banking to securely share customer data with third-party financial service providers. Open banking helps customers derive insightful information on their spending habits and helps them identify potential savings opportunities. Users can leverage this feature to save more using their savings account. Open banking also helps customers take more informed investment decisions.
- Robo-advisors are now offering algorithm-driven investment advice: Certain banks offer the services of robo-advisors to their customers, thereby helping them benefit from algorithm-driven investment advice. Robo-advisors consider an individual’s risk tolerance, financial goals, and time horizon to create a personalised investment portfolio for their clients. Robo-advisors can help investors eliminate human bias and emotion while investing, thereby helping them take investment decisions backed by data.
- Customers can use biometric authentication to access their savings accounts: Several Indian banks are already offering the biometric authentication feature through their mobile apps. Customers can choose from multiple log-in methods to secure their online savings accounts. Biometric authentication is one of the most effective security measures to secure one’s savings. Banks also offer other security methods like two-factor authentication to help customers safeguard their savings.
- Blockchain technology will significantly impact traditional finance: Blockchain and decentralised finance (DeFi) have taken the world by storm and certain customers around the world can already sense their growing impact in the banking and finance sector. Banks can look to turn to blockchain-based solutions to increase the security of their systems, and to improve transparency and traceability. DeFi is an extension of the blockchain technology that helps banks provide financial services without relying on centralised institutions.
- Banks are using AI and Big Data to help customers save more: Artificial Intelligence (AI) and Big Data are making their presence felt in almost all walks of life today, and the banking sector is not an exception. Banks are employing AI to help customers analyse their spending patterns and grow their savings. Banking apps are also helping customers analyse their investment patterns in the past to make better investments.
Individuals must check the savings account interest rate, the accessibility of customer service, and the features offered on the bank’s mobile banking app before opening a savings account with any lender.
