In the last 10 years, there has been swift growth in the fintech industry (the industry that creates programs and technologies that support banking and financial services companies). The technology has been fully adopted by financial services in the past several years and it is now integrated within most financial institutions’ operations. Fintech can basically be found in every sector including data management, administration and customer experience. Large banks around the world have welcomed and adopted fintech and have even begun to lead the transformation and setting standards for new financial service organizations to follow.
Therefore, in 2020 there is a huge expectation to see smaller institutions providing and perfecting currently existing technology in order to keep up with the larger institutions. Here are the latest fintech trends to watch out for in 2020.
Artificial intelligence (AI) and robotics
The new trend right now is automation and, so far, it’s been mostly used in customer service applications. Now it’s going to be used even more to include investments, compliance, risk management, analytics, basic accounting, mortgage lending, loan and credit card processing, logistics plus supply chain management. Customers can now expect faster and more accurate services tailored to their needs.
More financial service institutions are deploying chatbots and artificial intelligence to improve customer experience and automate processes. While freeing up humans to provide better and more personalized services, the chatbots interact with customers in real time to give them the information that they need when they need it, leaving them with high customer satisfaction.
People can expect to see many improvements in the way chatbots work as artificial intelligence is making it easier for them to act more like humans. Chatbots will most likely be more able to improve their understanding of conversational language (slang) and improve upon their grammatical errors.
Improvements should also be seen in the way services will be provided, based on information gathered in 2019 through conversations between chatbots and customers.
AI has helped to improve voice recognition, the ability of a software algorithm to match the identity of a person to his voice. Banks have been testing voice recognition for a number of years and have been perfecting it. In 2020 voice recognition will probably be used a lot in customer service as smart home devices increase the demand for, and the use of, hands-free banking and voice search. Instead of having to remember passwords or having to give all their credentials on the phone, customers can be verified through their voices when they call the bank to make payments or to transfer money or to report a lost card.
There is a possibility that institutions that focus on voice recognition will become more popular as customers adopt the technology due to its convenience.
Adapt to millennials’ needs
In the last ten years, financial institutions realized that millennials’ financial goals are completely different from those of the older generation. They are more likely to seek rent-to-own agreements, mortgage and debt management solutions more than they will seek business loans. Institutions are more likely to use the current technologies to satisfy the millennials who will be at the forefront of banking.
Software-as-a-service cloud services
Financial institutions are already using cloud services for human resources, customer relationship management (CRM) platforms and data storage. There is now a move, in 2020, towards using the services for cross-border data exchanges, billings, payments, and loan management for faster and smoother services.
Better online banking services
The great majority of banking customers prefer online banking to standing in the queue at the bank. Therefore, banks will most likely provide several ways of accessing their banking platform online. Some customers also prefer blockchain-based sharing economies so many banks will have to adopt the technology to improve online identity management, speed up cross-border payments, and to process commercial transactions faster.
Security and protection
While the above trends improve the quality and speed of services, they increase security concerns and the risks of cyber-crime. AI has already helped with fraud prevention and identify theft reduction, but cyber security will be of great concern as technology advancements bring new risks. In 2020, financial institutions will be forced to invest heavily in cyber security.
The Digital Banking Revolution by Luigi Wewege
Luigi Wewege, the Head of Private Banking at Caye is frequently in financial news and has written about the digital revolution that is taking place in the financial services industry in his book: The Digital Banking Revolution. He captures the trends accurately by recognizing that banks are being forced to put their customers first and listen to what their customers have always wanted and demanded. To please their customers and remain profitable and competitive, the banks are being forced to adopt these new technologies. Big data enables the banks to know everything about their customers’ needs and artificial intelligence is providing the solutions that will keep their customers happy.
In a nutshell, The Digital Banking Revolution is a survival guide for banks, top managers and leaders. It provides a strategic outline on how the banks can adapt to the digital revolution taking place, how they can evolve, survive and succeed in the digital age.
These are some of the trends to be expected in 2020 as technology continues to disrupt the banking and financial services industry.