With new standards set in digital adoption, financial institutions can’t afford to live in the wake of trends – it’s time to look ahead and be ready for what’s next. This means finding ways to disrupt the market and win the customer experience game.
Let’s take a look at how the financial industry is shaping up after the pandemic, including the major strategic areas that institutions should focus on how to start 2022 on the right foot.
Keep in mind that, because digital finance transactions frequently cross over to other industries such as retail, healthcare, and utilities, these trends are not just for finance. Some have already taken root in other industries and are moving towards finance, while others will start in finance spread outwards.
1. Digital banking makes cents
It’s a no-brainer, really. The technology is available, the benefits are abundant, and the tipping point is nigh.
Accelerated by physical distancing measures introduced during the pandemic, more people of all ages are using digital banking tools, who see them as an easy and secure way to manage their finances from any touchpoint.
Global Market Insights Inc. showed how the recent evolution of digital banking has already decreased in-branch visits by 36%; following COVID, this migration away from brick-and-mortar is expected to increase.
As digital flourishes and improves, fewer people will be going into brick-and-mortar banks as virtual banking gains the upper hand and changes the way people bank for good. The ‘digital-only banking’ evolution is in full swing and financial institutions should prepare for the new reality that most of the world’s banking will take place entirely online.
2. If machines can learn, banks can too
Since its inception, machine learning has promised big things, but only with recent advances in technology has it finally been able to deliver. As more people moved their life online during COVID, companies bore witness to their glaring service gaps and were compelled to explore how artificial intelligence solutions could accommodate the needs more efficiently.
Make no mistake – artificial intelligence completely changes the game.
From completing millions of complex transactions per second to eerily accurate predictive analytics, AI has massive potential in the finance industry to strengthen all aspects of a digital business transaction, from security (intelligent fraud detection) to customer journey personalization and advanced investment analysis. All signs point towards AI becoming the gold standard in ensuring that day-to-day transactions are the best they could possibly be.
3. Twin-turbo: tech and talent
COVID recovery is slower than expected, but the economy is definitely showing signs of life. Barring further setbacks, 2022 is expected to come in with a roar of investment across all major industries, including finance.
And we’re already see huge investments in both technology and talent.
With the sheer power of a fully connected world, and perhaps even their own failings in the mirror, many companies emerging from the pandemic are doubling down on technology’s ability to deliver better solutions, experiences, and outcomes. Couple that with a global labor shortage, and 2022 will see companies investing in better human talent strategies to attract and retain top talent that can make technology work for them.
Finally, and specific to finance, with more people adopting to manage their money digitally, expect huge investments to make fintech work better for consumers. This will open up new areas of finance to digitize, along with increased competition between vendors – which, of course, means that the digital solutions adopted by your company will be one of your main differentiators.
4. The Me Generation 2.0
A recent Salesforce survey found that a full two-thirds of today’s customers expect their financial institution to understand their unique needs and expectations, with over half (52%) expecting offers to always be personalized
Closely tied to consumer demand, the desire for a personalized customer experience makes sense. Each person has different preferences and won’t naively part ways with their hard-earned money. Their loyalty must be earned by providing them an experience they want, one that is tailored to their needs and speaks to them.
To do this, companies must dive into their customer data and get to know them intimately. And when you transform this knowledge into action with personalized offerings, you begin to cultivate a strong and long-lasting relationship with each valued customer.
In 2022 as the demand for personalized continues to increase – don’t ignore it.
5. Cutting edges and comfort zones
As the past year brought lessons and showed paths to the future, one thing is clear – banks will have to push boundaries and get out of their comfort zone if they want to adapt and survive.
Because of this, we expect a growing number of financial institutions to experiment with evolving business models and emergent technologies to offer customers a better digital experience.
Banks are poised to finally take advantage of the vast opportunities that digital media like the video has for their marketing and communication strategies. And heeding this call means investing in cutting-edge marketing tactics, like interactive personalized video, that is geared towards creating an exceptional customer experience.
2022 innovation starts now
Banks and financial institutions have always been early adopters of technology, despite playing in a more closed and sheltered market.
Now, the competition lies within the sector and the fight is coming close to home.
With fintech booming, new technology disruptions happening daily, and digital giants like Apple and Amazon making moves into finance, financial organizations are beset from all sides. The financial vertical may be more advanced than other industries, but this is no indication of how your financial organization will fare against other rapidly developing financial institutions.
More than that, this heated battle will also be unfolding in an arena charged by the pandemic, having accelerated technological advancement and changed consumer expectations in the last twenty months.
Investing in and advancing your digital initiatives has never been more important, so if you truly want to stand out in the increasingly saturated market moving forward, start innovating your 2022 strategy today.
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