The evolution of the banking industry has been pretty interesting. From taking a proactive approach to customer support to moving most business processes online, the industry has experienced phenomenal growth. And this is just the beginning.
The industry is revamping its business models by prioritizing user experience and eliminating complex products. Today, fast and convenient financial systems are becoming the norm for audiences. So much so that 61% of Gen Z and Millennials prefer digital banks to traditional banks.
In this article, we will explore the top banking trends and how they affect fintech companies.
1. Mobile Banking Will Continue to Be a Priority
The use of wallets and mobile banking applications has skyrocketed in recent years. Reports show that the total value of payments made using mobile devices reached a new high of $503 Billion in 2020.
Let’s take a quick look at this table to understand how people in the US are using mobile banking applications:
|Mobile Banking Features That Customers Value||% of Respondents Who Use these features|
|Checking Bank Statements and Account Balances||76%|
While the staggering figures above are a clear indication that mobile banking is here to stay, retail banking customers are expecting more features from their mobile wallets. Here is a study by Forrester and The Financial Brand that shows what customers expect from their mobile banking applications:
|Features Customers Are Expecting From Their Mobile Banking Applications|
|1.||Digital Wallet Integration|
|2.||New Ways to Use Reward Points|
|3.||Automatic Saving Options|
|4.||Tracking and Budgeting Tools|
Although mobile banking has experienced phenomenon shifts, it is still behind in terms of customer satisfaction. And this is why it will continue to be the top banking trend in 2022 and beyond.
2. Curbing Cyber Frauds
From phishing attacks to automatic withdrawal scams, cyber frauds are increasing in the banking sector. Reports show that online attacks have risen by 233% in June 2022 and remain a concern among customers. Although banks are doing their best to provide seamless digital experiences, attackers are using sophisticated technology to hack into consumer accounts.
To tackle such security concerns, banks should remain vigilant and implement effective fraud detection strategies. They can use RPA, Blockchain, AI, and Machine Learning-enabled tools to protect their systems against malware and online attacks.
Many financial institutions are also preparing training programs and online resources for customers to educate them on detecting fraudsters and prevent them from sharing their personal information online.
3. Using Data-Driven Tools For a Personalized Experience
According to recent research by Deloitte, retail banks are facing heightened customer demands for a more data-driven and personalized experience. This requires them to move beyond wallets and financial products and explore innovation opportunities.
For instance, the top-performing US community bank Oregon Bancorp blends commercial banking with regional mortgages and offers customers innovative products based on their needs. Another example of innovation is the self-service banking model that uses conversational chatbots to provide customers with a faster grievance resolution and an omnichannel experience.
Data-driven tools such as AI and a business intelligence dashboard can help you understand customers' needs and create a more tailored solution. You can also track digital touchpoints and know what is stopping them from reaching out to you.
4. Green Light For Cloud Platforms
Another banking industry trend in 2022 is the adoption of cloud platforms. IT spending by banks increased by 6.1% in 2022 to $623 Billion. And 82% expect to see more of their workloads move into public cloud infrastructure. As more US banks go digital, they need enough storage and networking capabilities to power their systems.
Adopting cloud computing solutions can help you provide real-time information to consumers about interest rates and policies, empowering their decision-making process. They facilitate seamless transactions between banks, customers, and third parties in a well-governed environment. Many cloud platforms come equipped with tools to help you scale your operations and deepen customer relationships in ways never explored before.
5. Digital Currencies Will Be Taken More Seriously
A surprising banking trend of 2022 that has made it to our list is the adoption of digital currencies.
Digital currencies are making inroads in the financial industry. And banks have started to notice it. While cryptocurrencies have a long way to go to get accepted, banks are exploring other forms and even issuing their own digital currencies to make cross-border transactions more convenient.
Payment organizations like Visa and Mastercard and US government authorities are also weighing in on making policies to make the digital dollar a reality for the financial sector.
Key Takeaways For Fintech Companies
While we have talked about the key banking trends of 2022, here are some valuable takeaways for fintech companies:
- New Regulations will Surface: In light of increasing cyber fraud, regulatory bodies will issue new regulations. Fintech companies should comply with new security and privacy laws to ensure customer data protection.
- Making real-time payments affordable: A game-changer in the fintech space is enabling real-time payments at low costs. As banks ramp up their payment systems, fintech companies need to be competitive and make cross-border payments more affordable and accessible.
- Increased consumer education: Although fintech companies have successfully innovated the financial industry, many consumers are still skeptical about their services. As new finance products emerge, banks and fintech companies will produce engaging content to boost customer trust.
As geographical boundaries are shrinking, banks and fintech companies need to push themselves and create an all-in-one platform that meets the diverse financial needs of the modern consumer. The above banking industry trends indicate clear signs that the industry will continue to thrive digitally. All that’s left to do for companies in this space is to make digital transformation their utmost priority.
Let Us Do the Heavy-Lifting!
At ATC, we help banks and financial companies tackle challenges and emerge as winners. From cloud transformation to custom application development, our technical expertise and industry experience will help you create a seamless experience for your customers.
We will first understand your pain points and use market-leading tools and solutions to derive a reliable and scalable solution. Get ready to thrive in a competitive market with our enterprise solutions. Drop us a quick message here, and our consultants will reach out to you.