by Contributor

(Sep. 8, 2022) – Since the inception of online banking and financial services, technology has drastically changed how we manage our money. From making person-to-person payments to investing in stocks and cryptocurrency, there’s hardly anything we can’t do from the comfort of our homes or even on our phones.

This article will explore three ways technology has changed how financial institutions conduct business online, including new norms in banking, lending, fraud detection, symmetric and asymmetric encryption examples.

1. Mobile Banking Has Become the New Normal

Can you remember the last time you went inside a bank? If you’re like most people, it’s probably been a while. That’s because mobile banking has become the new normal. In fact, a study from the Pew Research Center found that 77% of U.S. adults with a bank account use mobile banking.

This shift to mobile banking has been driven by the ubiquity of smartphones and the convenience they offer. Instead of taking time out of your day to visit a physical bank branch, you can now do everything from checking your balance to transferring money with a few taps on your phone.

Financial institutions have responded to this trend by investing in mobile-friendly platforms and apps that make it easy for customers to conduct their banking business anywhere.

2. Online Lending Has Grown in Popularity

In the past, if you needed a loan, your only option was to go to a bank or credit union and apply for one in person. Today, however, you have many more options thanks to the growth of online lending.

Online lenders like LendingClub and Prosper offer online personal, business, and student loans. This is convenient for borrowers since they can shop around for the best lending rates and terms without having to leave their homes. And since everything is done online, the process is often faster and more streamlined than traditional lending.

Financial institutions have responded to this trend by offering more online loan products and making the application process easier for customers.

3. Client Data is Better Protected With Encryption

As more and more financial transactions are conducted online, protecting client data has become a top priority for financial institutions. In the past, data was often stored on physical servers vulnerable to theft and hacking. Today, however, most data is encrypted and stored digitally, using symmetric and asymmetric encryption to make it much more secure.

Symmetric and Asymmetric Encryption

The key, or the code used to encrypt and decrypt the data, is the most significant difference between symmetric and asymmetric encryption. The same key is used for encryption and decryption with symmetric encryption. This makes it faster and easier to use but also means that the data is at risk if the key is compromised.

On the other hand, asymmetric encryption uses two different keys, one for encryption and one for decryption. It is more secure but also more complex and slower.

Symmetric Encryption Examples

If you are using online banking, the chances are that your financial institution is using symmetric encryption to protect your data. Online banking needs to be fast and easy to use, and symmetric encryption provides the best balance of speed and security.

Asymmetric Encryption Examples

If you are using a service that requires you to share sensitive financial information, like applying for a loan, your financial institution is likely using asymmetric encryption. In this situation, extra security is worth the speed and complexity tradeoff.

4. Fraud Detection with AI

Artificial intelligence (AI) is increasingly used to detect and prevent fraud. AI can be used to identify patterns in data that may indicate fraud, like unusual account activity or strange transactions.

This is beneficial for financial institutions and customers since it can help prevent fraud before it happens. And if fraud does occur, AI can help financial institutions quickly identify it and take steps to resolve the issue.

Financial institutions have started to use AI-powered fraud detection systems to protect their customers and themselves from fraudulent activity.

Final Thoughts

Technology has changed the way financial institutions conduct business in many ways. Technology has made everything faster and more convenient, from how customers bank to how loans are processed.

And as new technologies continue to emerge, we can expect financial institutions to adopt them to stay ahead of the curve and provide the best possible service to their customers.

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