The banking industry is continuously evolving, and these five recent innovations are reshaping how Canadians manage their finances. From the simplicity of contactless payments to the sophistication of biometric authentication, these advancements are enhancing the customer banking experience.
5 trends shaping the future of consumer banking
Mobile apps and online banking
Gone are the days of long queues at the bank branch or waiting for paper statements in the mail. According to the Canadian Bankers Association (CBA), eight out of 10 Canadians now bank online or use an app to manage their money, make transactions and access banking services conveniently. In particular, younger clients are leading the way in adopting digital solutions, and these technologies are expected to continue to increase nationwide.
Mobile banking apps have become increasingly popular in Canada. In addition to convenience, these apps prioritize security, offering features like 2-Step Verification and biometric authentication to access account information.
From the farmers’ market to the mall, Canadians are using contactless debit and credit cards and mobile/wearable devices for easier payments. According to the CBA, the average Canadian now uses Tap & Pay 10 times a month. These payments utilize Near Field Communication (NFC) technology, allowing customers to tap their cards or devices on contactless-enabled payment terminals. The NFC technology offers a safe and secure contactless payment system, so you can rest easy knowing you are protected against unauthorized in-store card use.
Understanding financial habits is crucial to manage money effectively. Canadian banks have been incorporating artificial intelligence (AI) and machine learning technologies to assist customers in making informed decisions to provide personalized financial insights. These might include categorizing expenses, tracking savings goals, and suggesting personalized budgeting tips. With this information at their fingertips, Canadians can improve their financial literacy and make more informed decisions about their money.
With the convenience of managing finances at your fingertips comes the heightened importance of safeguarding personal information. Cyber security has become a crucial aspect of consumer banking, protecting both banks and customers from potential threats. In recent years, several innovative measures have been introduced to enhance cyber security in consumer banking:
- 2-Step Verification (Two-Factor Authentication or 2FA) adds an extra layer of security designed to prevent unauthorized access to accounts. It requires users to provide two different forms of identification to log in, typically combining something they know (like a password) with something they have (like a unique code sent to their mobile device).
- Biometric authentication — sometimes an element of 2-Step Verification — uses unique physical or behavioural traits to verify a user’s identity. Common biometric features include fingerprints, facial recognition, and voice patterns.
- AI and machine learning can detect patterns and anomalies to identify suspicious activities and potential threats, alerting banks to take immediate action.
- End-to-end encryption converts all data into a string of unreadable numbers before sending it over the internet, protecting users from a wide range of potential cyber attacks.
Investing can be intimidating for those just starting, but robo-advisors can help simplify the process. Robo-advisors are automated platforms that use algorithms to manage investment portfolios based on a customer’s financial goals, risk tolerance and time horizon.
Robo-advisors can offer lower-cost and accessible investment options. They have gained popularity in Canada, especially among younger generations who prefer a digital-first approach to managing their investments.
These recent innovations in consumer banking are remaking the way people interact with their finances. As technology progresses, Canadians can expect even more transformative innovations in consumer banking, providing you with greater convenience, security, and financial empowerment.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.