From AI to all things IoT, Russell Bennett, Chief Technology Officer at Fraedom, discusses with Finance Monthly the top five technologies that are already making waves in the banking sector.

Over the past five years, technology has fundamentally changed how the financial services sector operates. Many retail banks already successfully cater to customers’ digital needs. Business banking is now beginning to follow retail’s lead – and here we outline five of the top technologies transforming commercial banking today.

  1. Biometrics and security

When adopting new payment methodologies, banks must strike a balance between ease-of-use, ease-of-access, and security. We’ve already seen that consumer payment methods using biometric authentication becoming mainstream and it won’t be long before corporate clients expect the same.

Extending this functionality into corporate cards has the potential to make commercial payments more seamless and secure. Mobile wallets that defer to personal attributes to make secure payments on cards offer a potential route forward.

  1. Artificial Intelligence

Automation is dramatically increasing the number of financial transactions in an organisation. However, while it can track and store more processes than humans can – and more accurately – it currently can’t provide the next level service many clients are coming to expect of their financial partners: planning and modelling.1

AI is rapidly establishing itself as the missing piece of the puzzle that takes the data flows created by automated transactions and knits them together to discover patterns. All this is important to commercial banks because patterns in spending and efficiency can potentially deliver valuable insights to help clients improve their financial health.

  1. APIs

Customers’ demands, and expectations are moving rapidly, so there is growing pressure on the banking industry to provide new, easy-to-use, frictionless digital services fast.

Application programming interfaces (APIs) provide the technology to exchange customer data with other parties in a simple and secure way2, facilitating rapid innovation in products and services. Creating new applications such as voice banking, P2P, loan processing and risk management and using APIs as building blocks, is now seen as the best way to keep up with the innovation challenges facing the financial industry.

Fintechs have dominated the API landscape by creating apps that have challenged and often surpassed solutions made by the banking industry.

To keep pace, banks now need to either invest heavily to develop this technology themselves or partner with fintechs in a bid to be more effective and efficient.3 By working together and taking advantage of APIs, banks and fintech firms can enhance the customer experience much more than either entity could do on its own.

  1. ePayables – Crossing over from the Consumer to the Commercial World

The use of different payment types is partly a response to the consumerisation of our financial experience. Corporate clients can’t understand why payments should still be a laborious process of raising invoices and purchase orders, requesting printed cheques or bank transfers and creating lengthy payment terms.

Instead, the immediacy of a card – real, virtual or embedded in an app – ties all the above elements together. It gives unsurpassed traceability and is easy to add to financial management software.

Historically, paying by using a card has been seen as a debt generator. However, using payment cards as a substitute for invoice terms makes them a useful tool both to enhance a company’s working capital positions and to improve traceability, security and the level of control that can be placed on business spend.

  1. Expense Management Systems (EMS)

An Expense Management Systems (EMS) is just one of many tools that can be brought together into a single financial view, helping businesses gain greater control over expenditure. Unlike written expense policies and separate transactional management software, an EMS embeds expense policies into the technology, allowing real-time reconciliation and approvals to take place.

Up to now, retail banking has been ahead of the game in embracing new technologies and digital disruption but corporate banks are now grasping the need to take advantage of the latest technologies to ensure commercial clients reap the same rewards - from workflow efficiencies through to intuitive, mobile first experiences, a trend that is only likely to accelerate in the future.