The financial sector continues to face numerous changes in today’s ever-evolving business landscape. As challenges are introduced, new opportunities arise.
Technology continually shapes the industry by providing these opportunities. These changes require a highly developed innovation strategy that will pave the way for new services and improved processes.
The result is a host of new trends that will help grow businesses and improve the economy. Here are a few of those emerging trends for 2020.
Companies are expected to leverage the power of Financial Technologies (FinTech) to build business models. A recent report valued FinTech at $127.66 billion in 2018 and predicts an increase to $309.98 billion by 2022.
All types of financial institutions, such as insurance, banking, and investment, need more secure ways of keeping sensitive information safe. They strive to improve accessibility and provide convenience while building trust.
Artificial intelligence (AI) is an essential technology in the financial services industry. It covers multiple aspects and helps companies identify data patterns, detect fraud, and manage risk. This leads to better decision-making with minimal human intervention.
Using AI, customers can also customize financial services and analyze budgets. It enables mobile pay and improves the overall banking experience. According to Gartner, 15% of all global customer interactions will employ AI by 2021.
Chatbots are not a new technology but didn’t catch on at first because they could not provide a human-like experience. The integration of AI changes that, solving a wide range of customer issues and answering questions.
Financial services can use these AI-powered conversational solutions to learn and grow from existing databases. This also occurs through customer interactions over time.
Chatbots can provide suggestions and answer customer queries that exceed expectations. They are a great way to gather valuable customer data and should be a part of your innovation strategy.
Blockchain is rising in popularity. It promotes accountability and provides security for delivering products and services.
Blockchain technology scrutinizes transactions, so they are cost-effective and verified. Think of the blocks as the digital information stored in a database, and that database as the chain.
Blocks store vital data such as the date, time, and dollar amount of a transaction. This tells financial institutions about the customer who made it without identifying the person’s name.
Each block is distinguishable from another. The chain consists of multiple blocks that are strung together.
Blockchain technology makes transactions more secure. This increases trust between the company and the customer.
Automation improves business efficiency. It increases the speed and precision of processes to save costs both in the short and long-term.
Research reveals automation is boosting revenue. In 2018, Capgemini reported 35% of firms in the financial services industry had experienced a 2.5% increase in revenue due to automation.
Automate repetitive tasks that require a lot of data. This improves task execution and accuracy.
Automation reduces the need to perform essential tasks manually, freeing employees so they can take care of other business processes. This increases productivity across the board and should be an integral part of an innovation strategy going forward.