In 2020, banks and financial institutions spent an estimated $502 billion on IT.
Banks are shelling out colossal amounts to upgrade their systems. The money is going into safeguarding data and enhancing digital banking.
Customers are demanding more efficient digital methods of accessing their accounts and completing transactions. Banks, therefore, have to position themselves to satisfy the modern tech-savvy customer.
Spending on IT will continue to inch up operation expenses for banks in 2021. As firms deploy the latest innovations, here are some digital banking trends you can expect.
Blockchain
Many bank executives say blockchain will revolutionize the banking sector. Blockchain promises a radical change in global financial systems. The technology provides a new philosophy of decentralized currency. The ultimate goal is to cut centralized processes.
Blockchain technology has encouraged a new crop of peer-to-peer lending platforms. These platforms negotiate in a decentralized manner.
Artificial Intelligence (AI)
Artificial intelligence has brought changes in every sector of the financial services industry. Thanks to AI, banking firms have improved customer service using a variety of smart systems. Chatbots are a good example.
AI will continue to dominate digital banking future trends in the banking sector. Financial institutions will continue to rely on it to execute smoother transactions in the front office. In the middle office, AI will play a major role in risk management and other functions.
Digital-Only Banks
The vast majority of consumers now prefer their banking online, as decibel.com shows. That’s why digital-only banking is among the hottest digital marketing trends in banking at the moment.
A digital-only bank refers to an app-based bank that doesn’t rely on physical branches. Instead, real-time updates and automated processes are used for most services. Customer support is provided via in-app chat.
The growth of digital-only banks has been phenomenal. Consumers love this new financial reality as it eliminates the need to waste time visiting brick-and-mortar banks. Moreover, customers don’t have to deal with painful paperwork.
Mobile-Only Banking
It’s not enough that you make banking services available online. American consumers want to access your services on their mobile phones.
89 percent of American bank account owners manage their accounts via mobile. That’s because of the convenience and accessibility mobile banking provides.
Fintech businesses have used this trend to develop banking platforms. Traditional banks are also following suit. Most of them are increasing their presence in the mobile banking sphere.
Data Use
Financial institutions rely on data analysis to understand the preferences of their clients. Banks no longer have to limit themselves to demographic, risk, and product ownership files.
Today, these institutions can access lifestyle and psychographic data when they need to. They can also access data on geolocation, purchases, and channel preferences.
Using advanced analytics, financial institutions can now determine purchasing preferences. They can also customize communication with both their current and potential clients. With this personalized approach, banks can make their marketing efforts more effective.
Omni-Channel Strategy
Mobile channels are currently dominating, as we pointed out earlier. That’s why you need to provide a mobile responsive web design if you’re starting to digitize your bank.
Besides mobile, banks are looking for other channels to better engage their clients. The ideal multichannel approach should include native solutions for major mobile platforms. It should also include desktop services, IoT, and offline solutions.
No-Card Transactions
Americans may not use cash as much as they used to a decade ago, but many still carry credit cards around. Unfortunately, credit cards can be vulnerable to social engineering. This encourages illegal bank account access attempts.
Digital-first banking helps curb this problem. Users can carry out POP and POS activities via quick recognition (QR) codes and other no-card means. Banks can now focus on banking services without depending on physical cards.
Biometric Identification
Biometric identification is becoming a trusted security feature for many banks today. Fingerprint, facial, and eye scanning are some of the features we’re seeing in many instances.
In the near future, biometric identification will become an integral part of mobile banking apps. This security feature will make brute force attacks and social engineering void.
Even if a laptop or phone gets stolen, consumers need not worry. Biometric identification will keep the client’s bank account safe.
Biometric identification techniques are also rendering passwords obsolete. This is a huge benefit, given that people tend to lose passwords.
Voice-Assisted Banking
Voice-assisted banking is another trend that is taking off around the world. Several American banks have already introduced pilot projects that have voice capabilities. Others are integrating their products with existing services.
It’s easy to see why banks are investing in speech-recognition technologies. The number of American internet users who use voice search will exceed 122 million in 2021. Banks that do not have voice-activated banking services will lag behind.
But how does voice-assisted banking help banks and consumers? One example is using AI-based voice recognition to confirm the identity of a customer. This averts social engineering.
Voice-assisted banking also makes it easier for clients to navigate their banking platforms. Consumers can also voice-lock their accounts.
Stay on Top of Current Digital Banking Trends
Trends in the banking sector will always fluctuate. Thus, it’s best to stay informed of what’s current and use what works for you. The digital banking trends we’ve shared in this post can help you meet the expectations of today’s consumers.
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