Amid the massive paradigm shift in work and business that the pandemic brought about, consumers turned to a digital-first way of interacting with businesses and each other – making it more important than ever for organizations to build out their digital offerings and meet consumers where they are: online.
Particularly for some industries – specifically banking and the financial industry – that were previously laggards in entering the digital era, now is the time to join the overwhelming movement toward online channels in order to meet consumer expectations, as well as leverage the necessary tools to maintain business productivity and continuity. Many financial processes, from branch attendance to card payments, were based in the physical world. With the financial industry shifting permanently to digital, there is an opportunity for financial services to reassess their long-term investments. As a result, we’re seeing key trends emerge that will become the fundamental basis for digital transformation initiatives in the industry moving forward.
The development of digital channels by financial institutions became necessary to survive, and even thrive, during the pandemic. 24% of global consumers plan to reduce – or completely discontinue – their visits to bank branches, even after the crisis is over; meanwhile, global mobile app and digital wallet usage escalated rapidly, with VeriTran recording a 180% increase in 2020.
As financial institutions looked to quickly build out digital channels for payments and account management, low-code technology quickly boomed in popularity among IT decision-makers and developers – it has the potential to create applications and websites with minimal coding, speeding up time to market for digital wallets and other channels from years to months, or even weeks.
This year has reached an inflection point between the capabilities of low-code platforms and the desire of financial institutions to speed up application development and improve digital reach, bringing citizen development methods closer to widespread adoption in the financial industry than ever before. In the coming year we can expect low-code, along with other technologies that hasten development, to be more prevalent as banks focus on enabling sustainable, solid development, in addition to offering speed and efficiency.
Other technologies – AI, biometrics, 5G and more – have been buzzwords for years now. However, many have proven their value and moved beyond hype to have enterprise-ready applications, enabling banks to simplify or secure various processes.
Although not every emerging technology should be implemented, financial organizations should prioritize figuring out which ones can help add concrete value and improve productivity – from automation to customer personalization, tech can add value across the enterprise.
Data and AI also are being used in new ways, from generating credit scores for customers new to the banking sector using leveraging information from smartphones to offer microcredits, which we expect will continue to gain traction in the coming year. To date, AI has been most applied in virtual financial assistants and chatbots. These advice tools are an area where analytics and customer-centricity converge to deliver a powerful user experience, helping customers manage complex data and empowering them to make better financial decisions. More than half of consumers say a personalized experience and a good technology platform are key factors in creating trust in banks, which AI and other emerging technologies play a leading role in enabling.
As more banks transition to digital-first, keeping a pulse on what’s next and staying at the vanguard of technological innovation is essential for maintaining a competitive edge, as well as providing the experience that consumers have come to expect.
Ultimately, innovation-enhanced financial institutions continue to demonstrate their scalability, usability and return on investment. In 2021, we anticipate seeing products and services continuing to mature and become more and more digital, providing the necessary experiences and functionality.
As we saw in years past with the emergence of fintech, players are now looking at the financial sector from all angles and insisting on changing the business as it once was run. Those who adapt most efficiently and creatively on their digital transformation journey will survive, while those who do not will disappear.