Future Trends of Financial Institutions
Financial institutions are deep into regulations, security and legacy infrastructure on the technological front. These regulations get in the way of institutions when it comes to adopting new trends. In recent years, they are investing mainly in launching new apps, new gadgets, new cross-platform software and the need for investment is at an all-time high. Digital laggards are going to lose 35 percent of the market share to the modern era of digital pure-plays.
However, in the coming years, the industry’s approach to technology will not be abrupt but a slow one to hone their technological direction. The main focus for the financial institutions in the future is to take a focused approach to innovations and getting a return on investment. This will be possible by moving from trial stages to receiving payments. Different banks have implemented many various forms of new technologies in the pilot schemes, and now the focus is on getting the ROI.
One of the primary challenges for banks in the coming years is to develop their technology strategy that goes hand in hand with multiple demographics. This is a challenge for banks because they need to move at the right pace for customers and staff, Gen Z customers, and baby boomers.
Banks will invest in meaningful technologies and will focus on making innovations count from customer’s point of view. PSD2 will change the game in the coming years because it will impact consumer trends which is a great opportunity for banks. New branch formats will start to pay dividends. Banks have adjusted their portfolios to include flagship stores in high footfall areas and smaller stores. These new branch portfolios will mature and get results.
Consumerization will take place in the banking sector as consumers are becoming more comfortable with banking tech. The number of consumers with biometrics on their smartphone has gone up from 19 percent to 70 percent. Big data and analytics will be beneficial to both customers and the banks. In the coming years, banks will understand the customer journey better by comprehending vast amounts of data created by the consumers and personalize their experience and interact better with customers.