The financial services industry has evolved at an incredible rate in recent years, underpinned by rapid advances in technology.
In fact, our own consumer research into people’s attitudes toward technology revealed that 62% of people consider easier and faster banking one of the best technological developments of the past decade. And it seems traditional banks are listening, with 56% now putting digital disruption at the heart of their strategy.
At the same time, rather than going away as traditional banks would have hoped, younger banks like Monzo and Starling have matured into formidable rivals for customers and their cash, putting pressure on the rest of the financial services sector to step outside its comfort zone, innovate rapidly and embrace a fail-fast culture.
As we look past the end of 2020 and into the future, technology is only going to play a bigger role across the banking sector. With that in mind, we’ve outlined the biggest tech-driven trends we can expect to see in 2021 and beyond that financial services need to take note of.
Marketing experts have promoted the benefits of personalisation to attract, and keep, customers. Big data – and artificial intelligence that helps us process, store, and drive insights from the data – means that personalisation will be possible on a scale never seen before.
Banks now have information about their customers’ behaviour and social and browsing history. AI enables real-time multi-channel integration of these insights to deliver a personalised one-to-one marketing experience for their customers at the time when the information is most relevant and useful (e.g a car loan or credit card).
That said, sorting through torrents of unstructured data for useful information is no small undertaking. It requires powerful data analytics technology if institutions are to reap rewards.
Already, financial firms have quietly introduced machines that think. Moving forward, robotic process automation (RPA) will continue to impact financial institutions to help them be more efficient and effective.
This includes processes such as customer onboarding, verification, risk assessments, security checks, data analysis and reporting, compliance processes as well as most other repetitive administrative activities. This frees up a bank’s workforce to perform more complex, value add activities.
Importantly, RPA shouldn’t been seen as a risk to jobs, it should be seen as an exciting opportunity to innovate. After all, with basic processes taken care of, people will have more time to focus on creativity in order to drive improvements.
According to Gartner, by 2020, chatbots will interact with the customers of 85% of banks and businesses. According to one report, financial chatbots save over four minutes on every interaction, so it’s within a bank’s interest to use them.
Customers of financial institutions have come to rely on the 24/7 service these conversational interfaces provide, as the possibility of an instant response and quick complaint resolution improves the experience of personal banking significantly. Conversational interfaces also provide an easy and economical way for organisations in the financial sector to receive customer feedback.
Blockchain will continue to disrupt financial institutions, beyond just ensuring data security.
Cases across the globe are already proving the value of blockchain in a wide variety of banking and investment applications, such as solving challenges faced by investment banks, to helping customers make safer payment transactions.
Industry-wide adoption of blockchain is unlikely to occur until we reach a tipping point, however – when that time arises, the regulators will need to determine best practice and how to oversee its use.
Biometrics – especially around mobile payments
Mobile payment innovations could do away with traditional wallets entirely as global consumers become less reliant on cash. Google, Apple, Tencent, and Alibaba already have their own payment platforms and continue to roll out new features such as biometric access control, inducing fingerprint, and face recognition, which is likely to become the preferred route of access over the next decade.
Greater collaboration between fintechs and traditional banks
While many financial institutions are continuing to adopt new technology to enhance operations and improve customer service, Fintechs provide exciting avenues for ongoing innovation. Already, financial institutions have realised they must learn how to use fintech to their competitive advantage, and this is only going to continue in the years ahead.
Tech-first is the only approach
A tech-first approach is now the only approach. How banks leverage RPA, Blockchain, Chatbots and Biometrics will determine their ability to tackle cyber risk and compete with highly scalable alternative banking providers, who are reducing the lending cycle down from a few weeks to a few hours.
Businesses are digitising their customer journeys and scaling-up transformation. They’re finding more agile ways of working, boosting productivity, building key skills of the future in-house and modernising with targeted investment in technology, data, testing, assurance and information.
If innovative technology is implemented incorrectly, then there can be a severe, negative impact not only in terms of working ability but a knock-on effect in the form of consumer trust. Something no business can afford to lose…especially at this time.
This can all be avoided by embedding continuous quality to help drive digitalisation and innovation. Combined, they achieve excellence in execution and help to deliver greater cost-efficiency, by identifying and mitigating business risk at every step.
At Expleo, we’re experts at shaping agile cultures across entire organisations, and at fully-equipping teams for the path ahead, embedding quality right down into your own DNA too. We help identify and mitigate business risk in technology-led transformations, using standardised methodology, industrialised automation solutions, global delivery and deep domain knowledge. With Expleo as a trusted partner, businesses can embed continuous quality to drive digitalisation and innovation.
By Angus Panton, Head of Banking and Financial Services, UK at Expleo, a trusted partner for end-to-end, integrated engineering, quality services and management.