Relegated to support functions only a few years ago, fintech has now become the driving force behind the growth of the banking and financial services industry. Startups are emerging, creating new technologies that hold the potential of transforming the financial world.
Banking and financial services companies are immersing themselves in technology to enhance their operational efficiency and boost agility so that they could retain their existing customers and woo new ones. They want to use technology to get deeper insights into customer needs and preferences to stay ahead of the curve.
Innovative new technologies will be the driver of the financial services industry, and we are set to see the signs in 2021.
People have now got used to the “instant” service levels of Alexa and Google Home, and expect the same from their banks and financial service providers. Rolling AI-driven technologies into their operational systems will allow these companies to deliver customers highly personalized experiences.
AI-backed intelligent voice and chatbots are reshaping the way banks interact and communicate with clients. Personal digital assistants provide customers customized information regarding savings for retirement, budgeting, etc. As 2021 rolls on, a growing number of customers will prefer interacting with a bot rather than a call center agent. While both banks and customers have shown a visible preference towards bots, their motivations are different. Banks are looking to save costs and be ahead of other banks in technology quotient, while customers feel their interactions with bots are faster and more controllable and convenient.
Banks are aware that smart assistants are efficient when they are integrated with other systems. 2021 could herald the coming of a more integrated eco-system to make such solutions work. And speaking of integration….
The legacy systems retail banks relied on were hard to bring together. This was an obstacle to gathering data from across systems, creating efficient workflows, and building automation into the processes. The IT environment can be simplified by leveraging APIs to facilitates such transformations. Banks always had data spread across myriad point solutions and systems. However, before the digital age, they were unable to get the most value out of their data. APIs have opened up access to this mammoth data and opportunities have emerged for every stakeholder in the industry.
Legacy systems are now getting connected with API-driven digitization. More banks are willing today to base their IT infrastructure on the cloud. Fintech firms with intelligent digital solutions to offer are now becoming a part of the banking ecosystem.
APIs will enable innovation, regardless of the application, which may be as diverse as customer care modernization, legacy modernization, data reservoirs, or any other. You could say, APIs will become key digital transformation enablers.
User experience has moved from superficial constructs to firmly occupying the heart of the interaction with customers in the financial services industry. This is a space with intense competition today. The financial products and services sector has now come to believe that the core of a digital-first strategy has to be user experience. They know that the way to gain a competitive advantage is by embracing a customer-focused approach. To emerge a leader, a fintech enterprise needs to upgrade digital product usability, to meet the most current expectations of customers. And one of the key customer requirements is to embrace the digital world across mobile, web, desktop, and social media channels.
Thus, the future will be about delivering an intuitive, seamless, omnichannel user experience to customers. Digital-first strategies that make UX the cornerstone will help cement relationships with customers, drive up usage, and improve customer loyalty -even more than they do now!
Digital technology is becoming a great equalizer between large and small players. Even the biggest brands in banking are exploring partnerships with some fintech startups or niche solution providers. They are eager to reinvent business models and be relevant in a rapidly changing world of finance, forex, wealth management, investments, etc.
Digital platforms are allowing banks and financial services players to focus on what they do best and easily collaborate with other players to offer more well-rounded offerings to their customers. For instance, digital platforms will allow a bank to offer a bouquet of services to its customers, including a brilliant remittance solution from another bank. The digital world enables such collaborations and competitors can become partners.
Many banks have also set up incubators specifically for fintech start-ups. This is enabling them to take a stake in the future! Digital platforms can lead to lead digital banks.
Digital banking is here. Digital banks are nimble, data-driven, and design-led. They focus on adding value to modern customers through innovative practices like on-the-fly creation of financial products and features like robotic assistants, instant loans at ATM, missed call recharge, personal loan on net banking, etc.
This migration from traditional to digital banking is already underway. Various banks and fintech enterprises are offering different degrees of banking services that incorporate high levels of process automation and web-based services. 2021 will see more of this and at an accelerated pace.
For years now, technologies like AI, Robo assistants, and automation have been spoken of in the context of banking and financial services. What used to be seen as an “established banks v/s new-age fintech” dynamic is now rapidly coming together to form a large digital finance ecosystem. Banking is changing for the better, powered by the quest for digital-driven innovation.