Home Entrepreneur 8 ways digital banking will grow in the next 5 years

8 ways digital banking will grow in the next 5 years

April 9, 2021

6 minutes of reading

Comments expressed by Businessmen the contributors are their own.

One of the things we learned over the past year is that you can speed anything up. The Bank and fintech The compression industry for nearly a decade of e-commerce for a period of 10 months. Not surprisingly everyone has adapted. Consumer expectations have changed and companies have pivoted as well.

This change has been shown in fields captured by customers This includes many people who have never completed financial transactions online before. Currently, millions of people are banking without a physical location, and that trend is unlikely to change. It is often cited that necessity is the mother of invention. In many ways, this pandemic has shown the need to be also the mother of the adopted child.

Now, entrepreneurs, Industry leaders and executives face an unprecedented and unexpected rate of change. It is estimated that progress can become a “new normal” for years now within a few months. The future of banking will differ not only in faster digital adoption, but also in the services provided, who provide them, and the relationships that institutions have with each other and their customers. surname.

Soon, the most successful banks will rely less on traditional services and revenue streams. They will be more dependent on their ability to see end-to-end customers’ financial needs and respond to those needs in a connected, seamless, and easy way.

The following eight factors will notice significant to 2025.

Related: 6 Trends every bank should be ready for 2021

1. Physical impairment

The relevance of traditional banks will continue to slowly, slowly but steadily, give way to the rampant use of digital services through mobile phones, computers, and other devices. While physical banks are unlikely to disappear entirely in the next decade, many remaining banks will have to reuse to serve niche needs in general. increasingly available online.

2. Thinner wallet

For consumers, it is beneficial to maintain access to a variety of payment options, but those options will include cashless. Not only is electronic transactions generally more convenient and efficient for individuals, but the digital financial ecosystem also offers significant advantages for businesses, governments, and say economies. general. The question is not whether companies and countries will not use the cash – but who will lead the charge or who will follow them.

3. Payment without card

A century ago, it was almost impossible to convince someone that one day their entire liquidity would be available to view and transactions would be completed through a small plastic card. Today, you may have the same difficulty convincing some people that the card will soon be outdated as well. Asian markets lead this trend, where more places 50% Transactions are carried out using digital wallets. The strong growth of paymentable IoT devices and associated services is the main driver of this trend.

4. Competition with non-bank organizations

Despite the ongoing debate between lawmakers, regulators and executives, SaaS firms like , and is not considered a bank. However, increasingly, they will serve customers’ financial needs in the same way that traditional banks do today. The proliferation of super apps like ‘S , Grab, and Gojek’s will also continue to disrupt the financial world.

5. Appropriateness of credit

Consumers will continue to rely on credit as long as wages and spending needs are deviated. However, what Was A willingness to change is the way financial institutions make credit decisions, which will affect the relevance of credit scores. Similar to how credit institutions took a more holistic approach to credit rating after the 2008 financial crisis (considering home value, criminal history, career background (industry and other non-traditional factors), today’s organizations are turning to using artificial intelligence to analyze the risks and rewards of loan consumers. The amount of data available to banks is increasing, and they will increasingly use it to explore better decision-making methods.

6. Micro personalization

and controlled by AI offers a new paradigm in financial services, one in which banks treat all customers as if they were their biggest priority. Instant loans, proactive product recommendations, detailed purchase instructions, budget recommendations based on factors like real-time location, spending profiles, and more are ready to go. a new standard for a personalized approach to financial institutions.

7. Interoperability

There are many players in the financial landscape, including traditional banks with online services, digital-only banking, fintech apps and related service providers, sellers and, of course, people. consumption. Diversity is good, but it can also cause significant transaction, privacy, and fraud concerns for all parties involved. As a result, disruptive innovations can only disrupt financial markets to the extent that consumers trust their safety and effectiveness. The solution to these challenges will increasingly come to financial and payment stacks that provide design-driven interoperability.

8. Regulations

The initial shift to digital financial services has seen a surge feedback from regulatory agencies. When new technology comes into being and technology giants like and increasingly disruptive in the financial industry, these shifts will force policymakers to identify emerging threats and address risks in a holistic manner. In contrast to today’s predominantly national surveillance systems, a global approach may be needed to ensure stability in the sector and we could see an increase in level agencies. new permissions and monitoring.

Related: The top 5 fintech trends will shape financial markets by 2021

The future of digital banking looks bright, but the unprecedented rate of innovation and a change in consumer expectations require a new level of agility and future thinking. Even when financial institutions try to differentiate themselves from their competitors, co-innovation becomes an integral part of success.

People and technology will both play an important role in these developments. The digital technology and service capabilities must be extremely flexible, constantly available at the time the customer needs it. However, human capital will be just as important as any other asset. Leaders will have to know how to sharpen their skills, retrain and retain talent to drive innovation. And they’ll need to do all of this while challenging their team to do the things that customers of tomorrow would expect. The companies that successfully combine these two dynamic forces – people and technology – are the ones most likely to lead the challenging, changing times ahead.



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