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Discuss about the Trends and Technologies in Banking for Behavioral Sciences.

In the following report, two latest technology and trends in the banking environment have been highlighted. The first technology has been taken as digital banking. The second technology has been taken as cloud environment.

The implication of these technologies in the banking environment has been analysed and discussed. The issues that are related with these technologies in the banking environment has been discussed and possible recommendations for each of the issues has been highlighted. Cloud computing has been a boon for the banks in the recent years as it has helped the financial institutions to increase their cost savings and focus on their business operations effectively. Digital banking has gained tractions in the recent years due to the rapid development of IT technologies and internet. Both of these technologies have tremendous capabilities to assist the banking environment ton gain a competitive edge.

In the report, both of these technologies has been evaluated with their benefits as well as issues and the challenges they face in the current situation with respective to the banking environment. 

The main pillar of any financial system is the payment system. In 2016, the number of non-cash medium of transaction ranged over half a trillion dollars from all over the world. With digital banking, banking institutions can move their banking services over the internet. Several web based services and high automation levels are necessary to incorporate this service in the existing banking transaction methods. Digital banking helps individuals to access their banking data through ATM services, mobile devices and personal computers.

This latest trend incorporates a front end which customers can see, a back end which can be accessed by the bankers and a middle ware which connects this two nodes. Digital banking can perform almost everything a traditional bank can do and has the same functions just like a normal bank such as online services, branch offices and bank cards (Raskin and Yermack 2016). With the rise in digital innovations and e commerce solutions, the adoption of digital banking has skyrocketed among the consumers. The increase in smartphones during late 2008 also contributed a lot in the proliferation of the technology.

The implication of this technology in the banking environment showed that the banks which extensively incorporated digital banking had lower profit margins than the branching banks due to the trouble in deploying deposit funding, low revenues and higher labour costs. In contrast to this, banks which adopted digital banking had a much higher growth rate than traditional banks (Broeders and Khanna 2015). Also, banks which utilized digital banking are more financially competitive as they have can access economies in the deeper scale than normal traditional banks. It can be stated that as the internet accessibility increases, the financial performance of digital banking will improve as well. 

Introduction of Digital Banking

There are several issues with digital banking which needs to be addressed.

The first on is attaining a perfect application. A proper digital banking smartphone application gives immense reassurance and power to the user who is accessing it. Smartphones are getting smarter and personal day by day with lock screens comprising of biometric authentication nowadays. This factor needs to be taken into account by developers who needs to develop and upgrade the applications for retaining customers from time to time. With the digital banking applications allowing users the comfort of accessing the financial data from anywhere and anytime, the developers should work hard to provide the customers with a seamless app experience. In spite of this, several digital banking apps are filled with bugs and often face performance issues which makes navigation extremely tedious, resulting in the crashing of the application (Dapp and Slomka 2015). This immediately reflects the company’s inability to provide customers with a fluid app experience.

The second issue is the threat from cyber-attacks. As the applications deal with financial transactions, they are vulnerable to frequent attacks from cyber criminals. Even with protective infrastructure, there is always the slight chance that the data that is being handled by the application can get compromised.

The third issue is the delivery speed of the service. To provide customers with seamless transactions, organizations often invest more on delivery speeds rather than the quality (Bose, Luo and Liu 2013). This can result in several bugs in the apps which is normally ignored by the institutions.

To address the first issue, proper professionals of quality assurance needs to be contacted to assure, assess and inspect the quality of the respective digital banking software. The professionals need to be involved in the SDLC stage of the application at an early stage so that they can develop an application of premium quality (Schuchmann and Seufert 2015). With rigorous testing, they can find the issues and provide proper patches to fix the bugs.

To address the second issue, proper security testing needs to be conducted to check all the vulnerabilities and issues that can be utilized by the attackers. The internal architecture analysis and the banking system needs to be properly analysed with the security testing.

To address the third issue, proper software testing needs to be conducted before the application hits the market. By properly analysing the issues, banks using the digital banking platform can identify the issues and terminate it at the requirement gathering stage.


Unlike the fixed legacy systems and IT infrastructures that are used traditionally by banks, cloud servers provide both flexibility and agility to deploy the necessary infrastructure for IT. As banks are evolving to properly manage the influx of data, the data centres have to evolve as well to handle the constant information flow across various environments. The cloud environment allows the banks grow organically in several geographical locations organically without the need of maintaining a physical presence in the region (Hashizume et al. 2013) The cloud environment enables the banks to create new services and markets with the prospective users to gain competitive advantage. The banks can create new customer centric business models with the help of cloud environments to increase profitability and growth.

The cloud servers can enable banks in the future to check analytics of data and process credit card requests. Technically, the cloud servers allows the bank to configure, integrate and assemble technology for meeting the goals of the bank institutions. In the area of analytics, it helps to integrate customer data to gain real time insights across various platforms of banking. In the area of business services, it can incorporate other third party services for supporting customer’s grievances by extending the financial ecosystem. Cloud server are also used to centralize the desktop management through a private cloud system in the bank for better flexibility and control (Carlin and Curran 2013). It also allows the development team to separate the banking environment for testing and development by creating a virtual environment. The cloud environment can be utilized by banks to back up important business data in case a disaster strikes.

Endpoint management is also enabled with cloud servers in banks for better corporate governance and policies. Also, this new technology allows the banks to maintain a storage solution for real time analytics process and trading data. Sometimes, the banks can transfer their payment functions to the cloud environment due to agility, efficiency and cost savings (Jain and Paul 2013). In the future, this technology will allow banks to address customer engagement and risk management through better analytics of big data and mobile technologies. 

There are several issues with incorporating cloud services with the banking environment. The first issue is data security. Keeping the business as well as customer data is important for every financial institutions.  As the banking data is personal and sensitive, they are susceptible to extreme vulnerabilities (Garg, Versteeg and Buyya 2013). For each compromised data, the banks have to handle the extra overhead costs.


The second issue is compliance and regulation. Adopting a cloud environment in a bank requires jurisdictions and business partners to comply with certain standards. The laws related to data protection dictates how the banks and other financial institutions will store and manage the particular data. The executives of the banks are particularly concerned that keeping the data in cloud servers will result in negative publicity and hefty fines.

The third issue is related to control. With the adoption of cloud servers, the control of certain business data and applications can fall into the wrong hands. The person handling the data needs to be well trained as most of the time the data is client based and extremely sensitive (Fernando, Loke and Rahayu 2013). Handling critical updates of the cloud system infrastructure to the service provider is very dangerous as one wrong move from the service provider can bring down the entire structural integrity of the bank. This is one reason why some banks are still reluctant to move their business operations to cloud servers. 

To address the first issue, the processing operations and the data need to be checked properly before passing onto the cloud servers by the banks. The banks need to differentiate data according to personal data, strategic data, business data and customer sensitive data. Certain types of data need to be monitored and regulated properly by the banks to prevent the data from being accessed by hackers if the institution is susceptible to cyber-attacks. Proper risk analysis need ti be carried out to assess the required security measures in the banks.

To address the second issue, the banks need to state their own legal and technical security requirements properly. The banks need to properly communicate with the jurisdiction bodies for proper implementation of the new technology (Arora, Parashar and Transforming 2013). The stakeholders and other business partners need to be made aware of the new changes that are being implemented in the banks.

To address the third issue, the authority needs to make sure that the data processing is properly monitored and governed by them. They need to understand that the new technology is required to assist them in their business operations not depend on the technology entirely for business operations. Staffs who handle personal and sensitive data needs to be properly trained about the risks that are associated with the data that they are handling (Rittinghouse and Ransome 2016). The service providers should also be aware of the risks with the data that they are handling. The legal qualification of the service provider needs to be assessed properly by the bank authorities. The level of protection provided by the service provider to the banks needs to be checked as well.

Introduction to Cloud servers in Banking


To conclude the report, it can be said that both of these technologies has the capability to change the banking environment if the recommendations are implemented effectively. Cloud servers are necessary in the banking scenario due to their disaster recovery solutions mainly which is not possible with mainstream hardware solutions. Digital banking is also necessary for banking environment to attract more customers in the environment due to the ease of functionality and accessibility. Both of these technologies has arisen with the advancement in IT revolution and will improve the banking environment in the long run, if the challenges and issues are resolved properly. 

In the coming years, these trends and technologies will have a wide impact in other financial sectors too besides the banking environment. Currently, with the rise in cyber-attacks, both these technologies are unable to reach their maximum potential. With the advancement in cyber security and proper awareness of the attacks, these technologies will change the total landscape of the banking environment.


Arora, R., Parashar, A. and Transforming, C.C.I., 2013. Secure user data in cloud computing using encryption algorithms. International journal of engineering research and applications, 3(4), pp.1922-1926.

Bose, R., Luo, X.R. and Liu, Y., 2013. The roles of security and trust: comparing cloud computing and banking. Procedia-Social and Behavioral Sciences, 73, pp.30-34.

Broeders, H. and Khanna, S., 2015. Strategic choices for banks in the digital age. McKinsey & Company.

Carlin, S. and Curran, K., 2013. Cloud computing security.

Dapp, T. and Slomka, L., 2015. Fintech reloaded–Traditional banks as digital ecosystems. Publication of the German original.

Fernando, N., Loke, S.W. and Rahayu, W., 2013. Mobile cloud computing: A survey. Future generation computer systems, 29(1), pp.84-106.

Garg, S.K., Versteeg, S. and Buyya, R., 2013. A framework for ranking of cloud computing services. Future Generation Computer Systems, 29(4), pp.1012-1023.

Hashizume, K., Rosado, D.G., Fernández-Medina, E. and Fernandez, E.B., 2013. An analysis of security issues for cloud computing. Journal of internet services and applications, 4(1), p.5.

Jain, R. and Paul, S., 2013. Network virtualization and software defined networking for cloud computing: a survey. IEEE Communications Magazine, 51(11), pp.24-31.

Raskin, M. and Yermack, D., 2016. Digital currencies, decentralized ledgers, and the future of central banking (No. w22238). National Bureau of Economic Research.

Rittinghouse, J.W. and Ransome, J.F., 2016. Cloud computing: implementation, management, and security. CRC press.

Schuchmann, D. and Seufert, S., 2015. Corporate learning in times of digital transformation: a conceptual framework and service portfolio for the learning function in banking organisations. International Journal of Advanced Corporate Learning (iJAC), 8(1), pp.31-39.

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