Banking as a service has picked up momentum the last few years, in today’s largely digital banking environment, it’s now safe to say that the future of banking is one where strong tech backed infrastructures and integrated systems will be the driving force behind how businesses and individual users interact with banks of the future.
In 2020, Covid-19 changed the fundamentals for several industries and today’s day to day work processes for banking and financial providers is also being rewritten. Leading global banks have usually been early adopters of innovative financial technologies, but as we progress through 2021, what are some of the key fintech trends set to shape the year for banking as a service?
Increased Use of AI for Better Context
Banks have to keep prioritizing improvements on their digital customer experience and journey as the need for mobile-first and branch less services will continue to rise. This will require banks and financial institutes to focus on improving not just their interactions with customers via multiple digital channels, but also ensuring that there is always relevant context and meaning to each interaction. Artificial intelligence will play a pivotal role to enable better intake of customer data and prompts online. AI helps fetch important data from multiple online sources and banks will have to further how they analyse these sources of data to breakdown their customer’s profile and main pain points. When this is streamlined with the right fundamentals in place, product based recommendations and personalized interactions can be scaled to meet the needs of global users more efficiently, in a digital-first environment, these are some of the main criterion that matter most to business outcomes.
Open API / Open Banking Systems will be a Natural Choice
Interoperability and better integrations are not just buzzwords in today’s banking environment but more a must-have. Today’s open API and open banking systems allow for a more solid foundation that supports a digital-first banking model. Open APIs allow for easier interoperability between multiple mediums and core systems, third-party vendors and aggregators, the last few years have been evidence of the growing importance of these systems. One of the best things about open APIs is that it can help ensure a more robust banking system and helps reduce disruptions if one process or system fails within a core system.
Better Enhancements to Online Banking Systems
Millenials and Gen Z have often shown signs of preferring digital banking mediums to actual branch visits but today’s new normal has made it a mandatory issue for every generation to adapt to digital banking models. Mobile banking, web banking, self-service banking platforms will continue to grow in importance while the need for security in critical high value transactions via these mediums gets a steady boost. With lower human interactions between banking providers and users, the type of enhancements that banks of the future will need to prepare for will have to be more than just futuristic but also convenient and safe.
Customer Information and Data Security
A growing use of remote banking models also mean that there is now increased exchange of (very often critical and sensitive) information between banking systems and cloud platforms. These exchanges that take place between a bank’s core system and often times other third-party players now demands that advanced technologies (Blockchain, etc) are put to use to verify and protect customer data and financial information across these multiple touchpoints.
The Future is – Connected Banking
2020 taught businesses and banking leaders a lot more about adaptability, 2021 will be a year with a renewed focus on better automation and connected banking systems. Now is the time for banks and financial providers to learn how to be more agile, secure and digital-first by leveraging tehcnologies to stay ahead of the game.