The financial sector in 2020 was recognized by an unexpected expedition in digitization engagement driven by the influences of the COVID-10 pandemic. Exchanges shut down their trading floors and migrated to remote trading, personal trading apps saw record transaction volumes, and call center personnel kept customer relief going by operating from their living rooms.
The financial services industry was able to predict the weather and continue its operations, which has now become clear that the winds of change are not transient. However, we will see extensive shifts in how the banking sector creates its customer growth through personalized customer experiences and journeys. Here are the top current Fintech trends that we’re doing to identify to dominate financial industry conversations. So, without any further ado, let’s get started!
Top 10 Current Trends in the Financial Services Industry
1. Banking goes ahead cash with digital engagement
In society, the role of cash was in flux before 2021, using contactless payments already a way of life across Asia and Europe. In 2020, more than 40% of retail banking customers were dependent on mobile apps to drive their business. Both financial tech firms and traditional banking address new finance apps to offer new services and programs to match customer requirements and access to early wages.
According to a survey conducted in April 2020, over 26% of US businesses reported an increase in digital payments by customers due to the pandemic. In 2021, as an immediate reply to customers’ growing reliance on contactless payment and banking solutions, the fintech industry is likely to continue to invest in digital platforms and analytics tools.
2. Data that does more – 0.1 billion borrowers plus counting
Customer-permission, traditional, public record, small and large businesses – data has a lot of adjectives preceding it. It doesn’t matter how we identify and categorize the data, the truth is there is a lot of it that’s untapped and keeps the banking sector from operating at its max efficiency levels.
3. Focus on Digital Transformation
It is seen that the financial services industries are continuing to focus on digitization and the adoption of emerging and modern technologies to bring in operational efficiencies, improve speed-to-market, and provide superior customer experiences.
The banking and financial sector cut down spending on branches to invest in online banking and self-service digital channels to become more popular among customers. Digital wearable appliances offer targeted services to customers.
4. Identity growth for the succeeding generation
The increasing lifestyles of people have put personalization on hyperdrive and customer intelligence is becoming a necessary survival strategy for those in the market wanting to compete. Identity growth is not just for marketing purposes but it also leverages across the lending lifecycle and customer interaction. Regardless, consumers will continue to demand security and trust.
5. Focus on fraud
According to the Aite Group, the business costs have reached $1.2 billion in 2020. With the continuously growing technology sector, comes evolved fraudsters. Whether it is loyalty and rewards programs or accounting openings, there are various entry points. One of the fastest-growing types of financial crime in the US is Synthetic identity fraud. So make sure you’re using the best protection strategies for your business and customers that provide the highest levels of confidence in the industry.
6. Robotics and AI
We all know that customer requirements and competitive forces demand the banking sectors adopt full-fledged digitization to decrease costs and keep operating margins healthy. The new regulatory requirements and laws regarding protection put extra strains on emerging technologies and already-stretched resources are helping the fintech industry address these constraints efficiently.
Starting from using artificial intelligence to power chatbots for essential functions, now banks are realizing the double advantages of optimizing costs while improving operations.
Do you know who will become mainstream customers of banks? Yes, Generation Z is the correct answer. These modern and emerging generations of customers expect to be treated as individuals and not as segments, which proves that the banking sectors are also required to incorporate a much stronger form of allowing them to choose their own suite of products based on their requirements and preferences. However, we can call this the opposite of a one-size-fits-all approach.
8. Developing a Cognitive Side to the Business
The customer requirements and competitive forces demand that the banking sector adopt full-fledged digitization lenders to decrease the costs and keep operating margins healthy. The new laws for data protection add extra strains on emerging technologies and they are helping the banking sector to address these constraints efficiently.
Various pioneering companies are experimenting with more than one use case of Ai in their operations starting from AI-based chatbots to using technology for critical functions. Banks are realizing the double benefits of optimizing costs while improving operations. However, these evolving technologies such as Robotic Process Automation and ML are helping the fintech industry with highly reliable and cost-efficient robotic operations. While the banking sector still requires a huge number of people with various skill sets, they may see redundancy in many of their current roles.
9. Improved Customer experience
Whether your project is small or large, enhanced customer experience helps to drive everything starting from better decisions to customer attention and need. Implementing decision environments that cater to consumer requirements with top-notch data is the first step to make this happen within financial institutions. Looking at the future, the next frontier is obviously digital expansion which will help financial institutions to add solutions from numerous providers and arrange decisions across multiple systems.
10. Insurance becomes personal
The year 2020 was filled with a major health crisis and economic distress, insurance companies identified how they did business almost every day to offer comfort and stability for their customers. Let’s say an auto insurance provider offered some discounts and refunds given reduced levels of driving. The health insurance companies adjusted their costs and premiums to reflect reductions in non-essential surgeries. We can say that the most widely used and useful products are featured to the specific requirements of the customers and define their journey in 2021 even if they’re based on miles driven.
Building this level of personalization for their customers needs an emerging technology infrastructure that shows real-time insights from various data sources across the entire insurance life cycle.
These prevailing trends in the financial institutions can quickly achieve positive experience results with more established resources and re-build the banking sector. In recent years, it was troubled with rich premium offers, which left loyal customers feeling alienated at best, hopping to a new company at gravest. Creating personalized experiences for their customers and other banking sectors will stand to grow their market and build retention through a loyal customer base.
As we all know that the utilization of modern and emerging technology is the only way forward for the banks. For more effective and better results, the financial industry should identify those businesses that know the true differentiation for customers and examine the fundamentals underpinning their core operations. Here are the top 10 current trends in the financial services industry that cope with the development that have already made an impact with speed and agility to survive the next revolution. So, make sure to follow the best trends for your company if you’re working with the financial industry.