Technology Trends
Technological advancement drives the growth of FinTech. Amid the growing bonhomie between financial services and banking, the industry is calling 2022 the “Year of Value Chain Disruption”, driven by technologies such as artificial intelligence (AI), smart contracts (blockchain), and robotic process automation (RPA).
While technology disruptions in the value chain of financial services have been active for some time now, the focus will be on such activities that will deepen the value chain disruption at FinTech by 2022. Digital wallets are booming across the country. Globe struggles to set national regulatory standards. Let’s see how technology will shape FinTech and the bank in 2022.
Top 7 Technology Trends That Will Reshape Banking and FinTech
Digital-Only or Neo-Banks
Digital-digital-only or neo banks create new retail banking experiences and exist only in the virtual world. Digital-only banks offer financial services such as global payments, B2B transactions, and trading in cryptocurrencies. Neo banks such as Varo, Sym, and Aspiration already operate in the United States.
BNPL – Another Interesting Story That’s Still in Its Early Stage
Buy Now and Pay Later or the BNPL industry is booming. Consumers seem to be falling for the immediate benefits that BNPL plans offer. It is emerging as a further line of credit for modern-day consumers and aims to make the shopping experience easier for the customer. When the BNPL benefit or plan is implemented, the customer does not have to worry about cash or enter their credit/debit card PINs and other details to complete the purchase.
Global Financial Services Make-Over with Blockchain
The United States is a world leader in the use of blockchain, ensuring its widespread adoption in all four regions. According to Statista, Blockchain.com has 63 million wallet users as of December 2020. Blockchain technology is on track to completely transform the face of financial services globally due to its truly global reach and very affordable processing costs. In the US market, next-generation blockchain companies are on track to improve the cost and functionality of key infrastructure by focusing on specific application events. Blockstream, R3, and Symbiont offer common solutions, focus on securities in the capital markets and global credit registers, and ConsenSys and The Interface Financial Group target supply chain finance.
Banking-as-a-Service (BaaS)
All banks need to build an infrastructure or partnership to support basic functions such as saving money, making payments, and sending money. New age banks have turned this idea into a product. Banking-as-a-Service (BaaS) is a FinTech innovation and end-to-end process that empowers FinTech companies and third-party companies to integrate into the banking system through APIs. When implementing open banking services, BaaS enables financial services companies to develop their services within the bank’s regulated infrastructure.
AI a Must for Financial Institutions
Among the first sectors to embrace Artificial Intelligence (AI), banks continued to fine-tune their AI strategies, and this sector continues to see the widest AI adoption. It is estimated that AI will reduce banks’ operating costs by 22% by 2030, leading to savings of about $ 1 trillion.
In addition, AI is poised to equip financial institutions with the capabilities to deal with the growing threat of cybercrime and financial fraud. AI is already common in the financial services industry for providing customer support services by upgrading chatbots and other smart systems. Popular AI-driven customer service software includes Zendesk, LiveAgent, Freshdesk, and Vision Helpdesk.
AI-Powered Voice and Speech Recognition
AI-powered voice and speech recognition software and solutions are increasingly accepted by leading banks and financial institutions around the world. As a result, modern-day consumers are increasingly familiar with voice technologies.
More than 51% of consumers already use voice-enabled virtual assistants via their smartphones. Therefore, it is a matter of time before customers use voice technologies to interact with their banking and financial applications.
Hyper-Personalization for Ensuring a New and Improved CX
The Deloitte report emphasizes that ‘the future of retail banking: the need for over-personalization November 2020’, emphasizing that “over-personalization is essential for banks to respond to the obvious and hidden needs of their customers”. Can be used with AI activation to design and deliver hyper-customized CX or customer experiences. Hyper-personalization focuses on the banking and financial services sectors and includes steps to gain a comprehensive view of customers and improve data and analytics to deliver personal and contextual benefits.
