Digitalization in the financial sector has transformed into a top business imperative, stimulating the development of new products and services that help to improve customer experiences. This progression is putting pressure on IT Managers to reappraise their technological approach. In 2020, financial services were defined by an unexpected speedup in digitization due to the impact of the COVID-19 pandemic.
According to an anonymous report, more than 90% of financial services sectors are tapping sources into digital transformation approaches after being driven to reshape their business models and stay competitive in an evolving sector.
Option 1 – As we look back in 2020, the future of technology is going to play a vital role across financial institutions. Keeping that in mind, if you’re intending to change the face of the finance industry, you must search for a reliable financial software development company for an accurate outcome. So, make sure that the company you’re approaching offers innovative and cutting-edge software development services to all kinds of financial institutions which comprise a list of various small and large-sized enterprises, fintech organizations, insurance, and reinsurance companies, and many more. Find out more at the Financial Software Development service page of Tatvasoft and start building your upcoming project now!
In this post, we’re going to discuss the top trends of digital transformation that will reshape the financial services industry in 2021 and beyond. So, without any further ado, let’s get started!
Top 7 Digital Transformation Trends that will shape the Financial Services Industry
Trend 1: Accelerating Focus on Digital Transformation
The financial industry is perceiving a sustained and dynamic focus on digitization and the selection of brand-new and emerging technologies to bring in operational efficiencies, improve speed-to-market and achieve superior customer experiences.
Financial institutions are cutting down investments done on branches to spend on self-service digital channels to become more popular among consumers. Digital wearable devices, which trek the ability of smartphones, are making it possible for banks to give targeted services to customers.
Trend 2: Artificial Intelligence And Machine Learning Enhance Customer Experiences
In recent years, artificial intelligence and machine learning have transitioned from cool to vital. Previously, maximum business organizations adopted AI and ML for external functions, they are now key to mainstream productivity and revenue operators.
Modern technology advances allow financial organizations to leverage AI to manage sensitive financial transactions such as investing and lending critical functions and fraud detection.
According to a report generated by Businesswire, AI in the financial market was estimated at US$6.67 billion in 2019, and it is expected to increase by US$22.6 billion at the end of 2025.
Trend 3: Cloud Computing
Businesses that have migrated to cloud computing have been slower than anticipated in the banking industry, mainly because of security concerns and perceived convenience for smaller institutions. Processing a huge amount of data as quickly as possible helps to increase accessibility to insights across organizations and the use of hybrid cloud infrastructures will increase significantly in 2021.
Embracing cloud computing technology will be considered by financial institutions of all sizes in the future because of enhanced investment in industry-specific abilities by IBM and other providers. Such standard solutions of the cloud capabilities, eliminate up-front investment previously required and introduce issues like privacy, security, and compliance.
Trend 4: Big data
The financial sector is now starting to understand Big Data’s potential. It is getting smarter and faster, banks are believing in new ideas to market their services and utilize data to promote more personalized expertise for their customers.
One of the most important trends is that big banks will be capable of leveraging the hordes of customer data they have to use to train ML algorithms and automate their processes that help to save IT staff hours of work.
Handlers must step up their communication while implementing modern technologies. You can use Video Alerts to introduce digital innovations and showcase the advantages of digital transformation in the banking sector to staff. Digital signage is a great tool in establishing general staff experience and improving buy-in by leveraging the potential of passive connections in communal stretches.
Trend 5: Blockchain
As we all know, Blockchain is continuously disrupting financial institutions, surpassing just ensuring data security. Many cases across the world are already offering the value of blockchain in a broad category of banking and investment applications, to help customers make safer payment transactions.
The adoption of blockchain technology is unlikely to transpire until we reach a tipping point. However, when the time awakens, the controls are required to determine best practices and oversee its use.
Trend 6: Mobile pay
Following the growth of mobile banking, a growing interest in fees can be received using mobile pay as user experience, and on-demand support advances to be key areas of focus.
The majority of mobile payments year after year are exceptional. It was already $75 billion in 2016 and it is expected to increase to $500 billion by the end of 2021.
Trend 7: Robotic Process Automation
Financial institutions are under tremendous stress to optimize their expenses, create higher ROI, and increase productivity. Robotic Process Automation has converted their saving grace encouraging higher efficiency and enhancing productivity business-wide.
RPA represents a pragmatic robotic workforce that smoothens business processes by performing active and repeated office responsibilities normally carried out by bank staff in the IT department. According to Gartner, more than 70% of banking managers have achieved or had plans to perform RPA.
RPA provides IT Managers the capacity to automatically save and recover systems to defend the company from the damages caused by human error.
Lastly, we all know that more and more businesses are now planning to digitize their customer journeys and scale-up transformation. They are searching for more agile modes of operating, expanding productivity, developing key skills of the future in-house, and refurbishing with the targeted advance in technology, data, testing, and information.
If the implementation of modern technology is not done properly, then you may face a negative impact of working ability and knock-on effect in the form of consumer trust.
If the implementation of modern technology is not done properly, then you may face a negative impact of working ability and knock-on effect in the form of consumer trust. To avoid this, you can integrate continuous quality to drive digitalization and innovation to achieve perfection in execution and deliver greater cost-efficiency.
Here we discussed the top 7 trends to transform the financial service industry in 2021. These trends are never-ending; it is to examine how the financial sector responds to these innovations eventually, which can prove to be a turning point in their survival.