The world of banking is in the middle of a major change. From neobanks and other fintech startups to major technological giants such as Google, Apple, and Amazon, banks are under pressure to adapt – and traditional banks find themselves at a crossroads.
Banks can either embrace digital transformation with cutting-edge tools or risk becoming obsolete. Central to this transformative landscape is blockchain technology. Originally the backbone of cryptocurrencies such as Bitcoin, blockchain has evolved far beyond its initial application.
With its decentralized, transparent, and immutable nature, the use of blockchain in banking presents an enticing prospect for financial institutions seeking to optimize their operations – and expand their customer offering.
Common Problems in the Banking System
It’s no surprise that banking behemoths worldwide are pooling resources to explore this technology’s potential. Collaborative research and innovative initiatives are setting the stage for a banking ecosystem where blockchain isn’t just an afterthought but a core part of operations. But what are currently banking’s biggest challenges? Here are a few examples:
Ensuring Consistently Secure and Transparent Transactions
Blockchain applications in banking technology offer several key advantages in the banking sector. Firstly, it ensures secure and transparent transaction recording, a leap from traditional banking, where transactions are logged in a centralized database.
The blockchain operates on a semi-decentralized system, permitting only trusted entities to host validating nodes. This design minimizes the chances of the entire system getting compromised from a single weak point, thus curtailing the threat of fraud and cyber-attacks.
Inefficiency Caused by the Use of Intermediaries
Furthermore, blockchain technology in banking can significantly enhance efficiency and diminish expenses. Traditional banking processes involve intermediaries like clearinghouses and custodians, which extend the time and cost of transactions. With blockchain, the need for these intermediaries is drastically reduced, facilitating swifter and more economical transactions. Such efficiency can translate to substantial cost reductions for both banks and their clientele.
The Slow Process of Settlement
Banks often grapple with protracted settlement procedures riddled with numerous intermediaries. This is where the application of blockchain technology in banking can shine. The cumbersome processes inherent to traditional banking can be sidestepped using blockchain as opposed to centralized processing methods. As a result, transactions are not only traceable within hours instead of days but also streamline operations for both banks and customers, ensuring quicker turnaround times and more straightforward procedures.
7 Blockchain Benefits in Banking
There’s a long list of banking challenges that can be addressed by using blockchain banking solutions. Just a few of the use cases we see include:
Enhancing Security
Banks commonly face cyberattacks, technical glitches, and human errors that expose customer data. The use of blockchain in banking improves security through cryptographic protection for identity verification and data distribution without the need for intermediaries. Furthermore, blockchain reduces data breach risks by eliminating single points of failure. Smart contracts offer automated transactions, adding another layer of security.
Payments
Cross-border payments can benefit from blockchain’s direct lender connectivity, sidelining intermediaries like SWIFT – while SWIFT’s past vulnerabilities also make a clear case for blockchain applications in banking. Blockchain transactions are secure, fast, and low-cost, making international remittances more efficient.
Accounting, Audit and Error Reduction
Blockchain’s immutable records streamline accounting and audit procedures, likely enhancing regulatory compliance. Smart contracts manage exchanges, minimizing trust issues and reducing errors.
Overall, blockchain has the capability to ensure more control and implement further safeguards, drastically minimizing the risk of fraud and improper use of company resources. With blockchain, every transaction is transparent and easily verifiable, leading to more consistent and accurate processing by banks.
Lending and Borrowing
Blockchain in banking could revamp traditional lending by improving verification, reducing bad loans, and bolstering KYC and AML measures. Likewise, syndicated loans, which require multiple banks’ coordination, can benefit from blockchain by sharing KYC and AML data.
In conventional systems, it can be a tedious process for lenders to assess a borrower’s credit history, especially since detailed credit reports from third-party bureaus might not be available for many small business operators. Blockchain, on the other hand, introduces mechanisms that can enhance the accuracy, transparency, and secure sharing of credit histories.
Trading
Blockchain can revolutionize clearing and settlement in trading, reducing costs and increasing efficiency. When thinking about trade finance, blockchain also has a role to play because blockchain can digitize the paper-heavy trade finance sector.
Trade finance, an industry still reliant on outdated paper processes, can take up to 120 days for individual transaction processing, but blockchain offers a solution by digitizing the trade finance lifecycle, enhancing security, transparency, and efficiency, and modernizing document authentication and financing structures.
Asset Management
Blockchain impacts asset management by streamlining asset and stakeholder processes. It enables automated fund launches, digitizes assets for better market access and liquidity, and integrates customizable privacy settings for secure transactions.
Additionally, blockchain enhances user experience by embedding shareholder rights into digital assets, which reduces human error and promotes transparent governance. It fosters efficient cap table management, automated fund administration, and transfer agency in asset management.
Enhanced Compliance
The immutable nature of blockchain also bolsters compliance. By granting access to auditors and governmental authorities, every transaction can be viewed with unparalleled transparency on the blockchain.
Moreover, banks have an improved capability to detect and flag suspicious transactions swiftly, making the auditing process more efficient. This advancement benefits financial institutions and fintech companies alike, as they can now furnish digital records promptly, facilitating a swifter and more straightforward audit.
Popular Cases of Using Blockchain in the Banking Sector
Now that the benefits of blockchain in banking are clear, let’s take a look at a few use cases of blockchain in banking. In this section, we look at two most illustrative examples: CBDC projects and Onyx by JPMorgan.
CBDC Projects by Various State Governments
These days, Central Bank Digital Currencies (CBDC) are undoubtedly the hottest blockchain-related trend in banking. The concept of implementing digital tokens instead of physical tokens – banknotes – as national currencies has drawn global interest. That’s why more and more countries are actively researching the benefits and potential flaws of digital currencies issued by central banks.
One of such countries is Australia, where the Reserve Bank has conducted a CBDC pilot program. The results of this program outlined four financial aspects that can use digital currencies to their advantage. Overall, the potential Central Bank Digital Currency may lead to the following improvements:
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Ensuring uniformity among new types of private digital money. For example, such types include bank deposits in the form of digital tokens, as well as stablecoins backed by reliable assets. Here, the role of a CBDC is to ensure interoperability regarding new forms of digital money.
Promoting further innovations in asset markets. The main point of interest in this context is the implementation of specialized platforms using the DLT – distributed ledger technology. It gives the possibility to perform asset tokenization, including real assets, financial assets, and other types.
Enhancing smart payments. The introduction of a digital token supported by the central bank can enable various complex transactions that are not currently supported by payment systems. Another related possibility here is the rising popularity of smart contracts using CBDCs. They enable performing automatic payments upon meeting certain predefined conditions. For example, this allows performing simultaneous automated transactions between several parties, reducing the need for reconciliation.
Improving the resilience of the country’s digital economy. CBDCs provide an alternative method of payment for businesses and individuals. The most beneficial feature in this context is that this form of digital money does not require an account in a commercial bank. Additionally, with the help of modern technological advances, it may allow performing electronic transactions in “offline” or emergency situations, for example, during blackouts.
In the case of the Australian CBDC, it represented a direct claim on the Reserve Bank of Australia. However, other countries are actively experimenting with other types of digital currencies and their integration into national financial systems. For example, the Bank of England is currently developing a digital pound or “Britcoin” by testing the features of public blockchains and other distributed ledger types. Similarly, the European Central Bank is preparing the pilot program for the digital euro.
Now, according to the Atlantic Council, 130 countries have CBDC-related programs, compared to only 35 countries in 2020. Moreover, 11 states have already launched their respective digital currencies. So, as you can see, blockchain technology in the form of Central Bank Digital Currencies is the next big thing in financial systems around the world.
Onyx by J.P. Morgan
In 2020, J.P. Morgan, a subsidiary of one of the largest global banks, JPMorgan Chase, launched its blockchain-based platform. The creators of this platform, called Onyx, aimed at revolutionizing the flow of assets and financial data around the world. For this ambitious task, Onyx uses blockchain technology to enhance and automate various steps of payment and settlement processes.
Onyx has several components that are focused on providing different services. For example, Liink is a peer-to-peer network for the secure exchange of information. Coin Systems and its JPM Coin are designed to mitigate the flaws of existing payment systems. Digital Assets is a platform that enables converting financial assets into blockchain tokens in order to provide transparency and improve their mobility and utilization.
Overall, J.P. Morgan has surely found a way to integrate the benefits of blockchain technology into the banking sector. Onyx is constantly developing, bringing more services and improvements for its clients. The extensive list of features includes smart contracts with programmable payments, asset tokenization, cross-border, multi-currency, or machine-to-machine payments, and much more.
Conclusion
As you can see, the banking sector is undergoing significant changes these days. Conventional methods can barely keep up with the pace and demands of the modern world. That’s why even the oldest banks have to undergo digital transformation, including the implementation of blockchains. Banks need technological advances to enhance their services and bring their clients higher levels of convenience, transparency, and security.
Blockchain isn’t new, yet its potential in banking has still not been fully explored because of the industry’s conservative view and behavior. The fear of experimenting with blockchain and other technologies is fully understandable because of the risks. However, refusal to adapt to modern rules and technologies will very likely bring significant challenges in the future.
As a company that has 15+ years of experience in creating digital solutions (including blockchain-based) for the banking industry, we are open to collaboration with businesses of all sizes. A Neobank startup or an established fintech enterprise – we can satisfy every business need in blockchain and technology.
Our blockchain consulting and development services cover a wide range of solutions for banking, fintech, insurance, and many other industries – DApps (distributed applications), smart contracts development and audit, wallets and exchanges, AML/KYC compliance, and a lot more. If you’re looking for an experienced and reliable team that can build complex solutions from scratch and integrate them in your banking ecosystem, don’t hesitate to drop us a line and tell us what you need.
Use all the advantages of blockchain to the fullest with Intellectsoft!
FAQ
What are the benefits of implementing blockchain technology in banking?
In general, blockchain technology improves existing banking services and enables new types. It greatly enhances security and transparency of operations, especially for cross-border or multi-party payments. Among other benefits, blockchains also enable asset tokenization and digital currencies that are both convenient and secure.
What is the biggest blockchain-based banking trend in the world nowadays?
We would say that CBDCs are the biggest trend, considering their scale and influence on the banking system. The research and gradual adoption of digital currencies issued by central banks are spreading worldwide as more and more states look for a viable alternative to traditional banknotes. So, digital euros, pounds, dollars, and other currencies will soon revolutionize the global financial system.
How can blockchain make the banking industry more secure?
Blockchain is a type of distributed digital ledger, so some of its innate features, such as its decentralized nature, can be used by banks. As one example, instead of keeping data in one central server, banks use computers as independent nodes in a network. This way, they can record transaction-related data individually and then share and synchronize it with other nodes. Once information is recorded and synchronized, malefactors cannot secretly tamper with it.
What new services can I offer my customers if I employ a blockchain-based solution?
In the context of the banking industry, one of the most popular services would be smart contracts. Blockchain technology enables programmable payments that are performed automatically upon meeting predefined conditions. It also allows simultaneous transactions between several banks or other parties. Overall, blockchains make banking operations much faster, more secure, and transparent, improving convenience and customer satisfaction.
The hospitality industry depends a lot on keeping customers happy, but it’s
getting harder to attract and keep them. The pandemic hit this industry hard, and now market competition is tougher
than ever, with competitive offerings swaying customers. Hospitality businesses are willing to spend big to win
customers back. The main questions for many are: how can we stay ahead of the competition, keep our customers, and
increase revenue? Keep reading—we’ve got some answers.
Customers today have so many options that
getting their attention is a real challenge. It’s not easy to make them choose your business over others. What
worked 10 years ago doesn’t work the same way now. Back then, people often chose businesses based on reputation. But
with new types of businesses (boutique hotels, craft cafes) popping up or big enterprises getting a new strategy,
expectations have changed. The good news is these businesses have shown what works: great customer
service. They focus on personalizing the experience, making things easy for customers, offering loyalty
programs, and using smart technology.
In this article, we’ll explore these tech strategies and show you how
they can help your business grow, and double the revenue. Keep reading to learn more!
The Importance of Customer Satisfaction
in the Hospitality Industry
Customer satisfaction, which equals exceptional customer experience, is the
backbone of the hospitality industry. It plays a central role in driving revenue and loyalty, as satisfied customers
are more likely to return and recommend a hotel, restaurant, or other hospitality business to others. In fact, a
study by the Harvard Business Review found that a 1% increase in customer satisfaction can lead to a 0.5% increase
in revenue. Moreover, loyal customers are more likely to forgive mistakes and continue doing business with a
company, even if they experience a negative encounter.
Let's quickly review the challenges the hospitality
industry is facing right now so we can move on to the solutions and our case studies.
Challenges in Hospitality
As businesses navigate the changes in the
hospitality industry, there are some key areas where a little improvement can go a long way. From improving customer
service to embracing digital transformation and tackling labor shortages, we’ll take a closer look at today’s
biggest challenges—and, more importantly, how technology can step in to help. Let’s get started!
Poor
Customer Service
Even with strong and high-quality business offerings, poor customer service can
drive potential customers and existing customers away. Common issues include:
Long wait times in customer service queues (it is worth remembering that our attention spans 8 seconds, and we
live in a very busy world, so quick and efficient responses are more important than ever.)
Poorly trained customer service representatives
Lack of follow-up
Services not being done properly or quickly
Recall issues that require multiple service calls
These problems can frustrate customers. But, at Intellectsoft, we believe that the right approach, combined with
technology, can address them effectively.
Digital Transformation Gaps
Approximately 50% of hotels are adopting new technologies, with 43% automating repetitive tasks and 39%
upgrading existing systems. Source: workstaff.app
While many businesses are adopting digital solutions, some
still struggle with outdated systems and fragmented data. Legacy companies often face chaos when trying to manage
their data and create new systems or add features.
Some of the recent examples include clients coming to us to
create AI solutions for their services
while their data simply was not ready for the advanced tasks. We advise stepping back, communicating with a company
objective, and working on keeping the data clean (centralized, structured, and segmented).
When
we’re asked to create advanced systems using AI, we always emphasize the importance of organized data. To train AI
and build such complicated systems that truly work, you need to start from the very beginning—collecting, storing,
centralizing, and organizing it. We encourage our clients to align all departments to work internally on the data so
we can create a unified digital system that delivers personalized experiences.
If you’re unsure where to start
with your data, we can help. Collecting feedback at various touchpoints along the customer journey is crucial for
gaining insights into customer satisfaction and loyalty. Book an IT consultation with us, and our experts will guide
you in mapping out a path to get more from your data and build a system that works for your business and team.
Reskilling Staff
The pandemic hit hard in early 2020, especially for the hospitality and
travel industries. Even five years later, many businesses are still feeling the impact. Recruiting and
retaining skilled staff has become a major challenge post-pandemic.
Reskilling to address technology’s impact is of utmost importance, as about 40% of hotel General Managers
place it among their top three workforce challenges.
We strongly believe that adopting the right technology can help. For example, creating an app to train your staff
not only saves time but also ensures consistency in learning. AI assistants can also work alongside your team,
helping with tasks like recruitment (providing industry insights, crafting emails) and staff training. Imagine
having an app dedicated to making your team’s work easier and more efficient!
How Technology
Tackles These Challenges and Supports a Customer-Centric Hospitality Culture
Automation, AI, and similar
technologies may threaten many. However, the debate about replacing humans isn’t about that—it’s about cooperation
and working hand in hand with technology to achieve the highest standards and establish brand-new “golden
standards.” Technology is here to assist staff in listening to and collecting customer insights from data.
Let’s review some of our cases to see examples of how technology helps improve customer experience and supports
customer service.
Examples of Intellectsoft projects
Property management systems
(PMS)
We created a web platform and mobile app that makes managing daily tasks easier and offers
extra services to improve residents’ experience. It gives a clear overview of daily activities and helps with
managing units and users. Residents can easily book amenities, submit service requests, and report incidents. The
platform also includes features for equipment management, key instructions, workflows, and custom permissions. This
makes it easier for staff to stay on top of equipment and ensure residents have all the information they need. Plus,
tools like announcements, quick votes, a forum, and a community calendar help build a connected and engaged
community.
Guest Experience Management App
Our next app helped our client improve their guest experience by replacing printed
marketing materials and the need for phone calls with a smart solution. Now, guests can easily order in-room dining,
make reservations, and interact with staff— through a simple tablet in their room. The solution includes three
parts: a custom in-room tablet with a variety of services, an admin panel for hotel staff and service providers, and
a backend system that connects everything together. This approach makes things easier for guests and staff,
improving both convenience and efficiency.
Existing Customers First: Building Loyalty with
Personalized Touchpoints
Keeping existing customers is not just a strategy; it’s well-known that
retaining existing customers is more cost-effective than acquiring new ones. In fact, research shows that it costs
five times more to acquire a new customer than to retain an existing one. KPMG named customer retention as the
number one revenue driver for the company.
Moreover, a 5% increase in customer retention can
lead to a 25% to 95% increase in profits, showing the significant impact loyal customers can have on a
business’s bottom line. Retention strategies, like personalized experiences and loyalty programs, can foster
long-term relationships and generate recurring revenue, ultimately making them an invaluable part of any business
model.
Personalization: How Technology Can Help?
Everyone loves to feel special—it’s
part of being human. In hospitality, personalization has evolved from being a luxury to an essential standard. With
the right technology to manage your data effectively, you can deliver those “wow” moments that guests won’t
forget.
More than half of hotel chains are already using personalization features on their websites, booking
platforms, and apps, and another 39% are planning to follow suit soon. They’re tailoring experiences to fit guest
preferences perfectly.
Source: Deloitte
How does
technology make it happen?
CRM Systems: They help you keep track of guest preferences, booking history, and special
requests so you can offer services tailored just for them.
Loyalty Programs: Personalized rewards and offers show your guests that you value them, keeping
them coming back for more.
AI Personalization: AI analyzes guest data to predict what they’ll love (from room upgrades to
local recommendations) before they even ask.
IoT Gadgets: Smart room features like voice-activated assistants, or temperature controls
adjust to your guests’ preferences, making their stay more comfortable.
With tech-powered personalization, you’re building loyalty and maximizing the lifetime value of every
customer.
Our Case Study: Smart Hotel Management & Loyalty Program
For one of our
clients, we created a smart room solution, complete with a custom IoT system. Guests can use a mobile app to
control services, explore amenities, and find resort information-- with a special touch to their suite type. For the
client’s entertainment business, we improved their legacy software by running a full IT and code check, fixing
issues, and making the system better for customers.
Along with that, we developed a mobile app for the loyalty
program, allowing businesses to effortlessly reward their customers and keep them engaged with exclusive
benefits.
Our solutions not only helped the client with special experiences for guests; it also improved
operations, cutting costs by eliminating inefficiencies. Here's what our experts shared:
"We
transitioned away from ESB (Enterprise Service
Bus) systems, which previously cost millions, and replaced them with more efficient, self-managed solutions.
Similarly, we’ve implemented Device Farms that improved operations
and saved resources."
Leveraging Software to
Increase Upsell Opportunities
Here are some examples of tech tactics that will help your team sell more and
introduce new offerings to existing customers, improve overall efficiency leaving your team grateful:
Dynamic Pricing Algorithms
For finance and marketing teams, manually calculating pricing by segment to
introduce your clients can be incredibly challenging. AI-powered tools can strongly optimize these strategies by
analyzing your database in detail.
Upselling via Apps
Boosting revenue in the
hospitality business often comes down to personalized experiences. Imagine this: a guest books a room, and then your
app suggests a spa package or a room upgrade at just the right moment. Later, it nudges them to book a dinner
reservation or a guided tour designed to their preferences. With apps offering these personalized recommendations
during and after bookings, you’re not just increasing your revenue per guest but also skyrocketing their experience.
And you do it in a sustainable way, not by speculating, but by offering what your customers desire based on their
previous experiences. It’s a win-win: seamless, helpful, and far from pushy.
Inventory and Resource
Management Software
Making every resource count in your hospitality business is key. Inventory and
resource management software allows you to effortlessly track everything from linens to room availability, ensuring
nothing goes to waste. Having real-time insights to reduce overstock, avoid shortages, and optimize operations
assists sustainably keep everything under control and know what you need to focus more. It helps maximize room
occupancy by aligning bookings with available resources, ensuring every room and item is used effectively. This
approach leads to smarter management, better guest experiences, and a noticeable boost to your bottom line.
Adopting these strategies not only optimizes your operations but also drives business growth. Ready to discover how
technology can elevate your goals? We’re here to create a tailored solution for you.
Steps For Implementing a Customer Service
Technology Solution
Improving customer service in hospitality doesn’t have to be a daunting task. With the
right technology, you can smooth the path of your operations, speed up response times, and elevate the overall guest
experience. Here’s where you can make it happen:
1. Understand Your Needs
Start by
identifying the challenges your business is facing. Are you struggling to manage high volumes of inquiries, track
customer feedback, or personalize the guest experience? Pinpointing your needs will guide you to the best
solutions.
2. Pick the Right Tools
Choose technology that aligns with your goals. Look
for solutions that are scalable, easy to use, and integrate effortlessly with your current systems. Options like CRM
software, live chat tools, or a guest experience app can make a difference.
3. Equip Your
Team
Technology is only as effective as the people using it. Train your staff to make the most of the
new tools, so they can deliver exceptional service and resolve issues quickly. Confident, well-equipped staff
creates happy, loyal customers.
4. Keep Improving
Once implemented, monitor how well
the solution works. Are response times improving? Are customers more satisfied? Regular evaluations will help you
fine-tune your approach and keep things running harmoniously.
Some Tech Ideas for Hospitality
Businesses
CRM Software: Manage customer interactions and preferences.
Guest Experience Apps: Delight guests with personalized experiences right at their fingertips.
Amenity Management Systems: Simplify operations for everything from room service to facility
bookings.
Live Chat Tools: Offer instant support and answers.
Social Media Management Tools: Keep customer interactions engaging and organized.
Integrating these strategies will not only improve your customer service but also deliver unforgettable customer
satisfaction, loyalty, and, ultimately, your bottom line. Ready to take the next step? Book a consultation with our
experts.
Conclusion
To wrap up everything we've discussed, customer satisfaction and
experience are at the heart of hospitality. Retaining customers is more than just keeping them around—building
strong, long-lasting relationships and consistently meeting their evolving needs. By understanding their pain points
and offering personalized solutions, you can inspire loyalty and drive progress. With the right technology and
continuous improvement, your business can stay ahead, let go of what no longer serves you, and keep growing.
At Intellectsoft, with over 17 years of experience in software
development, our expert team is ready to help. We create everything from mobile apps to full-fledged portals and
systems, leveraging the latest technologies like AI, Cloud, and Machine Learning. With deep experience in the
hospitality industry, we’re here to craft personalized solutions that bring your business unforgettable customer
experience and retain your valuable clients.
Ready to double your revenue and level up your customer retention
strategy with personalized technology? Contact our experts, and
we look forward to working hand in hand with you to build or revitalize the perfect app or system for you.
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