The changes driven by technology have been disrupting businesses in financial services increasingly. As technology gets more complex, delivering seamless customer experience is becoming more challenging. Here are the five most important financial services technology trends in 2020:
The Era for Strategic Partnerships
The pace of change in the banking industry pushes organizations to create strategic partnerships to bring more value to their customers by improving their experience with their products. By partnering with other providers, organizations can extend their reach to new markets with new customer segments, more products and platforms.
We have seen many examples of how great things can be achieved through collaboration in the banking industry[i]. This also has a positive impact on consumer side s as they prefer if their main bank provides them with other services from different providers. These partnerships would require flexibility to make it easier to adjust to market changes and implement seamless integration between products and services.
Usage and Benefits of Artificial Intelligence (AI)
Adapting to new technologies may take some time for banking and financial services companies but it is expected that there will be an increase on investing in artificial intelligence (AI) from these organizations. It is no doubt that AI will bring business advantages such as the potential of;
• Introducing new offerings such as personalized, real time credit at point of sale;
• Enhanced solutions for preventing fraud[ii].
• Enhanced customer experience. (e.g. Using AI to streamline customer service and chatbots are going to be more common for the banking industry).
Also, enabling 24/7 access for customers to use their banking actions will be another way AI is going to be used.
Using AI to streamline customer service and chatbots are going to be more common for the banking industry. Also enabling 24/7 access for customers to use their banking actions will be another way AI is going to be used.
Blockchain effect
Blockchain technology enables keeping track of transactions in a more secure and stable way. Along with transparency, it provides highly secure and cost-effective operations. This will lead to more financial organizations to adopt technology as they realize how it can improve their operations in terms of security and customer satisfaction.
Also the Harvard Business Review[iii] predicts that it will disrupt banks the same way the internet disrupted media. While innovations in commercializing technology to apply it to financial services continue, blockchain and FinTech will shift focus towards more corporate use. And blockchain is more likely to become a vital part of financial organizations and their operational structure.
Chatbots for a better customer experience
Chatbots, provided by artificial intelligence, provide a more cost-effective solution to financial institutions and a faster way to customer services. In 2020, traditional communication forms such as email or phone are expected to be replaced by chatbots. By using chatbots, companies can respond to their customers’ problems and solve them faster. And it’s expected that in 2020, 85 percent of customer service interactions[iv] will be handled by chatbots.
The experience provided by chatbots can be personalized for better customer experience and even some advanced chatbots can provide financial advice. So, it’s predicted that this technology will continue to improve and allow banks to connect to their customers in a more efficient way.
FinTech Banking Model
By providing innovative and hassle-free ways of service, FinTech has become a threat to traditional banks that can’t keep up with changing behaviours of customers. These changes have been mainly towards a mobile-first approach for financial services and FinTechs have enabled digital solutions to create a seamless customer experience.
FinTech also allows new financial institutions to enter markets easier as these are often fast-moving start-up companies that focus on providing better mobile technology for payments and insurance transactions. But the growth of FinTech companies brings a risk to some of the biggest but slow to adopt type of organizations and have a negative impact on their profits.
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[i] Mastercard and Strands collaborate to empower small-to-medium enterprise banking with AI and cutting-edge payment technology, by Aoife Crean | Jul 9, 2018 | Strands News |
[ii] Using AI in the fight against fraud, by Chris Holmes | 23 October 2019 | Finextra
[iii] The Impact of Blockchain on Banks & Financial Institution, by Asia Blockchain Review | June 26, 2019
[iv] Meet 11 of the Most Interesting Chatbots in Banking, by Jim Marous | March 14, 2018 | The Financial Brand
