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Banks have been making serious digital waves in recent years. The pandemic can already be considered as a milestone in the evolution of banking, thanks to a confluence of trends that are revamping the industry by initiating business to adapt to the needs of employees and customers, making digital banking the way of the future.
Today, banks have grown more proactive as a result of COVID-19, questioning long-held assumptions and becoming more adaptable and innovative.
Trends that will be most influential in disrupting banking in 2023
- Hyperautomation and RPA
- Embedded banking
- Open Banking – Creating a ‘Digitally Yours’ Ecosystem
- The rise of Neobanks
- Blockchain & Cryptocurrency
- Machine Learning and trading
Hyperautomation and RPA
Gartner, an IT research and advisory group, coined the phrase hyperautomation in 2019. Hyperautomation is the process of automating manual operations using advanced technology such as machine learning and robotic process automation (RPA).
According to Deloitte, “using collaborative intelligence, technology and humans work together. Employees can start learning how to use automation and other software. Through Machine Learning, they can get to a state of AI-enabled decision-making. With hyper automation, companies can begin to reimagine work..”
Embedded banking, which involves banking outside of a bank branch, internet, or mobile app, began to gain traction in 2021 and is expected to continue in 2022. The most apparent illustration of this trend recently has been the purchase now/pay later loans given on shopping websites, but it extends beyond that..
Banks and other financial service providers will aim to present products to customers at the most convenient time for them. Offering mortgages when someone is looking for a new home online, as well as personal loans through home contractors, doctors, veterinarians, and lawyers, are examples of this. It is possible that businesses may be able to open bank accounts through their accounting software.
Open Banking – Creating a ‘Digitally Yours’ Ecosystem
In the banking industry, customers always come first. A flawless client experience not only boosts the bank’s legitimacy, but it also helps to build a lifetime of loyalty across its whole customer base. Following traditional banking intricacies could prove to be damaging to multinational banks’ growth as they seek to improve their customer connection and experience. For the industry, a compelling innovation strategy is unavoidable. And it is here that open banking plays a crucial role.
Open banking, a technology-driven strategy, gives financial ecosystems the chance to ‘innovate continuously’ and market themselves as ‘Digitally Yours’ for their consumers. When banks adopt an end-to-end approach, they assure a successful and long-term customer experience.
A blend of the words “finance” and “technology,” Fintech refers to any company that employs technology to improve or automate financial services and operations. The term refers to a rapidly growing industry that provides a variety of services to both consumers and businesses. Fintech has an almost infinite amount of applications, ranging from mobile banking to insurance to cryptocurrency and investment apps.
Fintech firms incorporate cutting-edge technologies (such as artificial intelligence, blockchain, and data science) into traditional financial services to make them safer, faster, and more efficient.
The rise of Neobanks
The fintech industry includes a considerable part of mobile banking. In the sphere of personal finance, consumers are increasingly requesting simple digital access to their bank accounts, particularly on mobile devices. Almost all major banks now provide mobile banking, thanks to the growth of digital-first banks, or “Neobanks.”
Neobanks do not have physical branches and provide customers with checking, savings, payment services, and loans through a fully mobile and digital infrastructure. Chime, Simple, and Varo are examples of neobanks.
Blockchain & Cryptocurrency
Cryptocurrencies and blockchain are gaining traction in tandem with fintech. Blockchain allows cryptocurrency mining and marketplaces to exist. Both blockchain and fintech are responsible for advancements in cryptocurrency technology. Gemini, Spring Labs, and Circle are some of the most essential blockchain companies, while Coinbase and SALT are examples of cryptocurrency-focused companies.
Machine Learning and trading
Being able to predict where markets will go is the Holy Grail of finance. It is no surprise that machine learning is becoming more prevalent in fintech, with billions of dollars on the line. The strength of this Artificial Intelligence subset rests in its capacity to process huge amounts of data using algorithms designed to detect trends and dangers, giving consumers, businesses, banks, and other firms a better knowledge of investment and purchasing risks earlier in the process.
Digital banking in 2023 is about reinventing how banks engage and interact with their consumers in all elements of their operations, not just new technology or digital services. In 2023, banks will have a lot of opportunity to leverage digital tools and data-driven personalisation to get to know their clients, give them advice, and help them achieve financial wellness.
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