Significant advancements have occurred in retail banking ever since it has been backed by technology. Digital delivery, mobile delivery platform, analytics’ are some of the trends that were infused in retail banking in recent year. Some of the other predictions included mobile payments, industry consolidation and contextual engagement which saw a slow start in the past year.
Trends are being predicted for 2016 in the digital & mobile delivery as well as customer experience and digital payments segment. Let’s have a look at how retail banking will be more customer-centric and secure in this coming year.
Banking & Fintech Partnership
This trend is being forecasted by almost all the major banks and the management. Most representatives of the banking and finance industry believe that fintech firms will significantly impact the future of banking. Both banks and fintech firms have their own strengths and weaknesses. The strengths will double if they play allies to each other. Banking industry is known for its scale of customers, which can be advantageous to the fintech firms. Moreover banking industry is stable, reliable and trustworthy. Banks were paralyzed by the legacy systems, which took away the opportunity to innovate and be agile, which was not the case of the fintech firms which were more tech-savvy. The banking products could not be improved owing to the lack of technological capability. The strengths of both sides will be combined, and it can become a win-win situation for the banks and fintech firms, if they partner. This partnership is surely being predicted in the coming year.
Enhancing the Customer’s Digital Experience
The digital revolution is slowly gaining pace. With digitization, banking industry can get insights on consumer’s choices and analyze their products and services as well as the delivery methods they have adopted so far. The consumer journey is being enhanced with the digital revolution. Your consumer will not need to wait in queues or it is not necessary for the consumer to come to the branch to finalize a new product. It can be done using the smartphone. There is a possibility for the branch as well as credit unions to engage the consumers at every stage of the purchase journey thus improving the conversions. The quality of experience is enhanced because of the informed decisions made by the banks. The banks are able to offer more convenience to their consumers. For this, the digital journey should be enhanced, and more focus should be given to the mobile user experience.
Big data has revolutionized major industries, and it is all set to make a difference in the banking & finance industry. With actionable insights, the industry can build new relationships, and strengthen the ones that exist. Data analytics can help build competitive advantage for banks and financial firms. In the coming times, the banks or firms that will succeed will depend on the data initiatives derived by them. Of course, big data analytics requires firm understanding of this technology and strength & expertise to derive results using it. New approaches are being determined for data storage so that data collection becomes easy and convenient. There is a growing need among consumers to get real-time recommendations from the banks, which is being offered by the data-driven actionable analytics.
Evolution of Digital Payments
In North America, the number of people who opted for mobile payments grew by 10 percentage points i.e. total users for mobile payments reached somewhere around 52% in this region last year. The growth was predictably flat. One of the main reasons is the slow adoption of digital payments, despite knowing the fact that they can make cashless payments using their mobile. Accenture, after studying the payment behavior, concluded that consumers require simple, personalized and seamless everyday solutions for their payments. There is a tough competition in the mobile wallets, with every other person coming upwith one. This has led to confusion and chaos, which has made the consumers move away from this mode of payment. Again, security proves to be a concern, which is again the reason for its slow adoption. Digital payments will see a rise in adoption this year, but it will not be an exponential growth till the time banking and finance industry takes the needs of the consumer into consideration.
Growth in Challenger Banks
Many legacy banks are struggling with outdated core systems & processes, and are buried in the roots of tradition. At this point, challengers are entering the segment in order to fill the gap that exists between the reality and expectations of the mobile consumer with respect to digitization. Newer breed of banks are being established to serve the changing needs of your digital consumer. This challenger bank is built with no support from another banking firm for back office support. They are found more in the UK as against the US, as the regulations for setting up banks in UK is less cumbersome. As of now they are challenging undeserved markets, and channels. They are filling the gaps left by the financial crisis, and are climbing higher through innovation.
Consumers are gradually adopting digital technology. You will see an exponential growth in the users of mobile banking, which has resulted in the growth of hyper-connected customer base, who access using multiple channels and devices. The consumers, with their constant engagement with the digital world, have started demanding a seamless and ubiquitous transaction across channels and devices. The customer looks forward to similar experience and service across the devices and channels.
The banking industry is all set to move beyond multichannel or omnichannel delivery; they are planning for an optichannel solution which will offer services and experience designed to suit the consumer’s need on the channel most preferred by them. This means, you will get a personalized service or solution that is designed using the analytics’ data, which will enhance your experience.
These trends are not just considering technology, but also the needs of the consumer and the way in which the consumer engages with the digital world. The digitization has been inspired in order to offer more realistic and futuristic systems & processes to make the whole experience customer-centric.