Let’s take a look at some of the technology trends that are shaping the financial services sector, from the giants to the smallest, most agile startups. Apart from the Covid-19 pandemic, some of the strong drivers behind these trends include the ever-growing numbers of customers who expect to access services instantly and from anywhere. Add to this, the vast amount of data we are generating, thanks to our always-online lifestyles.
To most of us, our phones are the primary interface between the digital world and the real world. Nowhere is this truer than in the financial services industry, with every bank and insurance company keen for us to download their apps. There are many reasons for this – from customer experience to economic reasons – it’s often far cheaper for banks to provide service this way than having customers come into bricks ‘n’ mortar branches. Throughout 2022 we will see banks and insurers increasingly deploying chatbots, cardless banking, and personalized communications, and they will all come to us through our mobile phones.
Automated Back-Office Functions
BNFIs reportedly spend about 10% of their operating costs on compliance operations. Rising operating costs mean slow bank processes, poor compliance management, and an unsatisfactory customer experience. Cutting down operational expenses isn’t the answer. RPA, also known as Robotic Process Automation, automates all manual processes such as customer onboarding, verification, risk assessments, security checks, etc., that usually require a workforce to complete. It also mitigates errors allowing companies to increase operational efficiency, improve accuracy, and stay relevant and competitive in an evolving finance automation market.
Managing Security Risks
Given the volume of digital transactions, cyber-security holds a critical value for BNFIs. A combination of keycodes, Voice ID, two-factor authentication, one-time passcodes, behavioral analysis, digital fingerprinting, and protective messaging are some of the widely integrated security methods. But the real issue lies in locating vulnerabilities in the first place. Cyber resiliency needs to be sharp, effective, and thorough and this will continue to have intense focus in 2022.
Blockchain is an emerging financial services technology trend transforming the financial world as we know it, but it’s still at a relatively low adoption rate. Blockchain is the technology behind Bitcoin and is widely regarded as one of the largest opportunities for banks and other financial organizations today. While blockchain is one of the hottest emerging technologies in the financial services industry, it’s not yet readily accessible. The most significant benefit of blockchain technology is in cross-border settlements. It can create a global network that is both highly cost-efficient and potentially transparent. Other benefits of blockchain technology include automating claim sorting and processing, helping financial firms to streamline KYC processes, efficient transfer of payments, and asset management.
Chatbots and Artificial Intelligence
Chatbots and other AI solutions are increasingly part of the digital transformation in banking. They are popular amongst financial institutions of all sizes, with everyone from large-scale banks to tiny credit unions implementing them. While chatbots are the more publicly visible versions of artificial intelligence, AI impacts back-office, product delivery, risk management, marketing, and security. Machines use simple algorithms to complete everything from data entry to risk evaluation to loan form processing, clearing up hundreds of thousands of employee-hours for top banks.
Digital banking comes with greater responsibility for security along with providing a frictionless experience to customers. Biometric access control offers a promising alternative to traditional PIN and password methods. New features like fingerprint, face recognition, voice recognition, and other biological characteristics allow banks to verify customers’ identities before processing transactions. As we continue to progress towards a heavily digital world, biometrics will help provide for secure, fast and efficient transactions.
Big Data Analytics
Several BNFIs invest in platforms that compute and store big data to enable convenient, personalized, and secure transactions. Big data in finance has led to significant technological innovations. It helps drive revenue opportunities by analyzing customers’ spending patterns, credit information, financial situation, and social media activities. This enables financial firms to deliver a more personalized recommendation to customers, create a more efficient process to drive competitive advantage, provide strengthened security and deliver better customer service.
Personalized Experiences for Customers
This is where the rubber meets the road. All of the trends mentioned above are being used by financial services companies to automate and streamline operations. As companies become more comfortable with these technologies; they will increasingly feel confident deploying them to solve problems relating to their most important asset – their customers.
This is where we can expect to see real growth and innovation in 2022. AI, cloud services, blockchain, and mobile are at their most transformative when pulled together to create solutions that improve the lives of customers. Customer Intelligence and the ability to act in real-time is one of the key trends impacting the financial service industry. With the help of Big Data and AI, marketing experts can easily derive insights to deliver a personalized customer experience. All they need is a smart balance of humans and machines. In addition to improvements in revenue, personalization increases conversion rates, improves cross-channel offerings, and develops a loyal customer base.
Well, here you have it. EZDynamic’s take on the top trends that financial services organizations are adopting, integrating and imbibing into their DNA.
EZDynamic is a boutique management consulting firm that caters exclusively to the Financial Services sector. Our Technology practice has been built on taking a business first approach in order to solve hard problems. EZDynamic’s talented team provides a smooth transition from technology consulting to development and implementation of your business vision through the adoption and integration of current technologies, to help position your business at the forefront of your industry.
EZDynamic’s other consulting verticals are Business Strategy, Regulatory Implementation, Change Management and Staff Augmentation.
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