When you think of a bank, what are the first images that come to mind? A teller at a booth? Security guards? A giant vault? ATM machines? All of these answers could be correct, but there’s more to a bank than meets the eye. The problem with picturing the modern bank is that people are stuck between two distinct ideas. The first is the traditional setting with tellers, offices, and other physical features, and the second is the switch to mobile apps for all of your financial needs. This second perspective of the bank has become a more dominating force.
Why is this image of the bank being a small app on your phone becoming more common in clients’ minds? The simple answer is that digital technology is the future for the financial industry, and it begins with the software that’s being used to help push change and innovation. The most obvious example is your bank’s app, but it goes well beyond just that. Here are some of the different kinds of software and services that banks need to be operational in this new digital finance landscape.
1. Customer Relationship Management
Keeping clients happy and using bank services is one of the top priorities for any legitimate financial institution. With that goal in mind, banks need ways to keep these customers and clients happy, and this is where customer relationship management (CRM) software comes in handy. The main goal of CRM software is to provide customers with features like documentation of records, client-specific offerings, marketing data, and integrated communication services. These are just some of the benefits that CRM software can provide a bank for managing clients. The most important aspect is client retention, so offering personalized sales, deals, and services plays a significant role in how people perceive their financial institution. Using CRM software, banks can effectively manage and improve how they offer their services to their existing customer base, and use the data they collect along the way to enhance their relations based on pattern-recognition and other methods of analysis.
2. Cash Optimization
Cash optimization is likely a term you may not have heard before, but if you work in the financial world, it might sound familiar. When it comes to banks, ATM machines are an essential function of the institution’s abilities, and ATM software helps banks regulate their cash flow. ATMs are often considered a simple machine that you either take out money or put in money, with other features giving you the ability to check on account balances. While those are the primary functions of an ATM for a client, a bank must manage how much money is being bought and ordered for these machines, and keep it within a reasonable limit. Having too much cash in a machine can be because it’s sitting in the machine not being activated within the cash flow, costing the bank money, and not enough cash can lead to insufficient funds for clients needing withdrawals. Optimizing cash using AI systems, forecasting, analytics, and management for cost-saving on cash orders helps banks keep costs down on ATM services for their operational needs, while increasing the effectiveness of these machines for client needs.
3. Trading Platforms
The first purpose of a bank is to hold and protect money for clients. Whether it’s a physical currency that you deposit at an ATM or through a teller, or if it’s digital finances on a bank’s mobile app, your first goal is to trust the bank with your hard-earned money. The second purpose is that banks act as an institution to invest with. Common investing strategies are high-interest savings accounts, government savings plans, and retirement plans, but many people also use stocks/stock trading, as well as forex trading. Banks offer software services and use these services as well to manage your investments through trading platforms. Maximizing the client’s money through trading helps improve the institution’s asset allocation, which is why they implement trading platforms in their software ecosystem.
4. Payment Networks
Purchasing, depositing, and withdrawing can be done through various means. ATMs, cashback through retail card machines, electronic transfer (e-transfer), debit cards, credit cards, lines of credit, Internet banking, and e-commerce payment options are types of payment networks that banks need to offer clients. These payment networks aren’t one individual type of software, but an amalgamation of many into their infrastructure. The use of payment networks allows clients and banks to access funds in more diverse ways, and allows for more access to banking services. Banks use these payment networks to help improve the services for clients, as evidenced by giving them more freedom and providing faster and safer transactions, allowing the bank to access more markets (millennial bank users, first-time bank clients, tech-savvy users, and clients with little access to a physical branch). Payment networks represent a giant leap in the software capabilities of financial institutions for customer use.
5. Information Management
Using CRM software is only one piece of the puzzle for banks and understanding clients’ information. Information management allows institutions to analyze large chunks of data in rapid time to maximize strategies for client-focused needs. Beyond the use of analyzing client data, information management helps organize and adapt strategies for bank operations. Storing data, cycling data, financial planning, and integrating other forms of management software (CRM) is part of the information management network. With all of the digital finance advancements, the need for a comprehensive system to help organize all of this user and institution data is necessary for a well-functioning bank, which is why they use information management systems.
Banking is changing in ways that never seemed possible. We’ve gone from physical assets like gold, to a fiat currency like bills and coins, and the future is showing us that decentralized digital currency could be on the horizon. With all of this rapid change moving us into digital finances, banks need to be able to handle this task, which is why they implement various software solutions. These types of software services and programs help banks maintain their ability to provide clients with services, adapt and scale to new changes, and improve their functionality on a daily basis.