Technology has been dramatically changing industries in every sector of the economy, and finance is no different. From the growing demands of mobile applications to the advancements of blockchain technology, 2019 financial technology trends are changing business processes as we know it.
To stay ahead of 2019 financial technology trends, here’s what you need to know.
1. Digital-only banks are on the rise.
As the world becomes more focused on delivering digital-first experiences, digital-only banks will become increasingly relevant in the market. With digital-only institutions taking on the traditional influence of the brick-and-mortar banks and credit unions, financial institutions with a more conventional process will find themselves in demand less often. By prioritizing innovative products and services that serve the increasingly digitally-savvy customer, these digital companies will increase the competition in the industry and push everyone to modernize.
2. The workforce is evolving.
If 2018 was disruptive in terms of customer demands on the banking industry, it will be nothing compared to how the workforce will continue to shape financial institutions in 2019. With the increasing need for mobile services, flexible working hours, and a work-life balance, financial institutions will have to manage both how this will affect their clients and what they require from their financial institution, as well as how they will manage their own workforce moving forward.
3. Blockchain will continue to shape successful finance companies.
As hackers become more advanced, the potential of blockchain and cryptocurrency will allow banks and credit unions to explore higher levels of safety in storing and transferring assets, make business operations more transparent, and also drastically lower operational costs by decentralizing entire processes. In fact, as advancements continue to be made, many larger banks and credit unions will consider how blockchain technology can be a replacement for the more traditional SWIFT banking system.
4. Sharing economies will continue to blossom.
Think Uber and Airbnb were big this year? 2019 will be even bigger for sharing economies, with financial services following where taxis and hotel rooms have come before it. What does this mean for financial institutions like banks and credit unions? We’ll see more decentralized asset ownership, along with data-backed decisions, between those with capital and those who use the capital, instead of most transactions going through a financial institution beforehand.
5. FinTech and outsourcing keep getting more relevant.
While it’s true that FinTech once had a difficult time breaking into the financial industry, it’s no secret that FinTech has made incredible progress and is now one of the leading trends in the financial sector. With investments in FinTech more than tripling in 2014 alone, FinTech could ultimately overtake the more traditional processes banks have in investing. For instance, online brokerage app Robinhood added 3 million accounts last year, increasing their business by 150% over the previous year. With the younger generation demanding better experiences and more agile companies, FinTech is targeted to continue increasing.
In addition to technology shaping institutions and how they operate, many banks and credit unions will also look towards outsourcing to slim their operational costs or provide more services without increasing their bottom line. Appraisal management companies, like MountainSeed, are just one area of financial services that banks and credits will turn to as they slim their bottom lines and look to increase their compliance while decreasing their budget.
6. The future looks like AI.
From chatbots to better customer analytics, AI will continue to dramatically shape how banks and credit unions update their processes. On the customer front, chatbots and virtual assistants are estimated to take over 85% of total business interactions by 2020, and will save financial institutions billions of dollars every year. In terms of security, AI will make advancements in regulatory compliance and cybersecurity by predicting end-user patterns and uncovering disruptive network behaviors that are key indicators of cyber attacks. In addition to that, AI will also drive customer insights with automatic data collection, helping financial managers get a better understanding of customer wants and needs and provide better service overall.
7. Banks and credit unions will be able to base their growth on customer intelligence.
While banks and credit unions once based their customer insights on studies and surveys, the uptick in available data thanks to tech advancements and AI will mean banks and credit unions will have a faster, more accurate, look into what their customers want from their financial services. More than just allowing financial institutions to adapt faster to changing customer needs, an increase in customer intelligence will also allow financial institutions to make better projections about what services and offerings they should pursue in the future.
8. Digital design will change everything.
As more and more decisions are based on user experience (UX), digital design in terms of financial services — such as banking apps, website design, customer service interaction — will continue to shape what the industry will prioritize moving forward. Paired with the increase in customer insights, both augmented reality and virtual reality will aid in creating more immersive UX experiences across the financial sector as services from financial institutions will become increasingly interactive and digitized.
9. Plus, the cloud will continue to grow.
Adoption of the cloud went to new heights in 2018, and it will continue to shape how finance transforms moving forward. With regulatory compliance and security continuing to lead the agendas of banks and credit unions, more and more processes will move to the cloud where security is currently at the forefront of programming, and cleaning up processes by transitioning to the cloud will make internal systems leaner and more efficient.
With technology, data, and automation dramatically changing the banking industry from the inside out, financial institutions might be at a loss as to where they should get started making adjustments to their processes for a better year ahead. If you’re interested in what all of these changes mean specifically for you, get in touch with us and we’ll be your partner as the year unfolds. Check out a number of our resources here, or reach out to us specifically to chat. We’re excited to talk.
You can also learn more about the latest from the finance industry by checking out our webinars, which are hosted by MountainSeed every month, and delivered with top financial experts on a wide range of topics.