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Updated by Jelena Cekic on Jun 13, 2019
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Jelena Cekic Jelena Cekic
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Banking and IT: Are We Entering an Age Where Paper Money Will Obsolete

As IT and Banking keep improving the way we pay for goods and services we must ask the question - is paper money a necessity?

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Electronic money is already around us

Electronic money is already around us

It will take a lot of time for paper money to become fully obsolete, but some experts say that it will happen, slowly but surely. Credit cards are so widely used that most people conduct their day-to-day payments without touching paper money. They use their mobile phones and credit cards to pay their bills and buy groceries.

On the other hand, a majority of people receive their paychecks and salaries via credit card transfer. So, we can safely say that “digital money” isn't anything new. On the contrary, it’s been here for some time now.

We can even safely assume that digital currencies will be widely accepted when the time comes. Of course, it takes generations to introduce such big changes so the best bet is that paper money won't be replaced by cryptocurrencies or any other form of digital currency any time soon.

Then, there's also the fact that a lot of people don't trust digital currencies.

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Big changes in the financial system

Big changes in the financial system

Modern and advanced technology is changing every industry in the world. The same can be said for the financial system. These innovations would eventually make cross-border and domestic transactions faster and more efficient.

Moving further, one of the biggest advantages that banking would experience is reduced transaction costs, making the entire payment system much more efficient and secure. Thanks to modern technologies, it will be possible to send money from one smartphone to another in real time.

Digital currencies and IT in banking are supposed to make people feel more connected to the financial system by providing a better overview of the system itself.

Still, the biggest interest that banks have when replacing paper money with digital currencies is finding a way to decrease the price of information and reduce transaction costs, and frankly, all other costs. In fact, modern banks are already doing it in a way by using chatbots in banking.
There's no denying that bots in banking help save money.

  • They are a cost-friendly customer service option
  • They empower users to practice free banking
  • They answer questions quickly and in a friendly manner
  • They are intuitive thanks to artificial intelligence, natural language processing, and machine learning
  • They help banks develop conversational banking strategies
  • They save time and manpower, allowing agents to focus on more complex issues
  • They provide instant access to a wide range of online banking services
  • Chatbots help many banks deal with huge volumes of customer interactions
  • Chatbots introduce a new concept, conversational banking
  • They replace humans in a new era of conversational customer service

The modern era of conversational banking is also customer-centered. Customer service efficiency plays a huge role in customer satisfaction. That's why banks use the most advanced IT solutions like web-based and app-based banking.

This means that users will deal more and more with digital interfaces such as AI virtual assistants and chatbots in banking where the absence of paper money is more than evident.

The more people use such interfaces, the lesser their need for paper money will be, making way for cryptocurrency and blockchain technologies. In that modern era, chatbots, AI, and automation will lead the way to the highest level of customer service efficiency.

Bots are already handling non-complex transactions and queries but, with the new age comes the ability to use intelligent bot building platforms such as SnatchBot to make these banking-specific AI virtual assistants even more intuitive and helpful.

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Introduction

There's no doubt that we are heading toward an age where paper money will become obsolete and replaced by digital currencies. The rise of digital and cryptocurrencies is already making waves and it will profoundly affect the way central banks conduct their business.

It will have a major impact on the entire financial system. Standard currencies might get replaced by bitcoins and other similar digital currencies and that's all thanks to the significant advancements in modern technology.

Central banks are on high alert as this new age of IT banking might involve some risk as well as opportunities. Some countries, like Sweden, are already on the verge of putting paper money out of use completely.

With this new digital age, banking will witness some great and innovative changes.