Just as the internet allowed us to leave face-to-face banking behind, now AI is driving a phase that surpasses online banking. The keys to understanding how it works.
“Invisible banking” outperforms mobile banking because it anticipates user demands and offers automatic responses.
In that case, the key tool was the use of the Internet. In addition to other derived technologies, it made it possible to expand virtual access to daily financial operations and say goodbye to traditional banking of physical branches, papers, queues and waiting rooms.
Now a new generation of financial services is emerging that has not yet translated into palpable changes for the end user, but that has been simmering among companies specializing in software for the financial sector and their B2B users.
This is the concept of “invisible banking”, which is gaining momentum more rapidly from the adoption of artificial intelligence, data analysis and the Internet of Things (IoT).
This stage of the era of online financial services has well-defined characteristics: it operates in the background, anticipates user demands and eliminates friction in the interaction of systems and solutions.
A big difference between digital and traditional banking is that you no longer need to fill out forms or visit branches to do a banking procedure, since everything can be done from the computer screen or cell phone.
Now, “invisible banking” goes a step further: it does not require screens, logging into specific websites or downloading applications from financial institutions to be able to operate.
Invisible banking anticipates customer demands
“We are experiencing a paradigm shift. Before, solving a banking procedure involved forms, lines or calls; today, everything happens fluidly, almost imperceptibly, like a GPS that suggests the best path before you notice the traffic. That is the essence of invisible banking: an intelligent system that anticipates demands and acts without friction, eliminating bureaucracy without losing care,” says Argentinian Julián Colombo, CEO of N5, a global company specializing in software for the financial sector.
“The true value of automation is not only in its efficiency, but in the intelligence with which it is integrated into people’s lives. Invisible banking is not invisible because it is hidden, but because it adapts, like an automatic light that comes on when you enter a room. It is present just when it is needed, without interrupting the natural flow of the day. It’s technology with a purpose: silent, precise and human-centric,” Colombo added.
The integration of technologies to automate banking operations is what allows the development of the so-called “embedded finance”, which opens up an infinite range of possibilities in the offer of services.
A study by the consulting firm Juniper Research estimated that global revenues from embedded finance will rise from $92 billion at the end of 2024 to $228 billion in 2028.
This is a market that is growing as the digital consumer demands more immediacy, simplicity, and personalization. You want to have the financial solutions you need available at a precise time, without additional steps or interruptions.
Angelo Cirillo, Chief Operations Officer (COO) of the Colombian firm iuvity, explained: “In the near future, users will not download a bank’s application to apply for a consumer loan; They will do so directly from the online store where they make their purchase. Nor will they go to a branch to manage a real estate loan, but will start the process on the same platform where they find their future home. Invisible banking is based precisely on that: on integrating naturally into the contexts where users already interact, solving real needs without friction.”
And he added: “Let’s imagine a specific case. A user who explores real estate offers from their social network or a specialized portal, clicks on a property, answers some questions in natural language for customers, and in that same experience receives a mortgage loan offer adjusted to their profile, with instant validation of their credit history. No branch visits, no papers, no complex processes. Technology allows all of that to happen in the background, while the user focuses on what really matters to them: their new home.”
The four keys to understanding how invisible banking works
DECTA, a global payment processing firm with fintech experts with offices in Latvia, Cyprus, the United Kingdom, and Ireland, compiled a list of the four key components of invisible banking:
1. Integrated finance: Financial services are integrated into non-financial platforms, allowing users to make purchases or access financial tools without switching contexts or disrupting their core business.
2. Frictionless transactions: Payments are made effortlessly in the background, eliminating the need for manual inputs such as logging into apps or entering card details.
3. Contextual awareness: Invisible banking leverages user behavior and activity data to deliver personalized services at the exact moment of need, without requiring proactive engagement.
4. Ubiquitous access: By using devices such as smartphones and IoT-enabled devices, invisible banking ensures that financial services are available everywhere, seamlessly supporting users’ routines.
Although at times the boundary between virtual banking and invisible banking may seem blurred to the common user, there are elements that mark clear differences.
In online banking, people log into websites and apps to access and interact, albeit sometimes passively, to manage their money. Invisible banking does not require direct contact with banking services. It is an internal existence/transaction that offers people what they want or need at that precise moment, without the need to use a product to reach that conclusion.
While online banking consists of carrying out personal transactions transferred to a virtual world, invisible banking exists almost situationally and is based on artificial intelligence and machine learning that tracks and remembers user behavior on different platforms, providing suggestions and efficiencies in real time according to what people want or need.
