In 2021, banks that take advantage of the efficiency, flexibility and convenience of digital banking will succeed
The past year has hit the reset button on how organizations across industries function on a day-to-day basis. Banks have always been early adopters of technology, and the pandemic has only further accelerated their digital initiatives.
Image source: Deloitte
Let’s take a sneak peek into the future of banking with top key trends that are predicted to transform the industry in 2021.
Connected banking – newer technology initiatives: 2021 is going to see a renewed focus on automation and lead to the emergence of connected banking. Banking operations are going to become much more agile, with an increasing need to access data anytime, anywhere.
- Impactful initiatives such as combating loan frauds, cybercrimes, voice recognition for customers and video interactions with banks will see a whole new horizon in 2021.
- New Fintech players offering AI solutions will help financial institutions move past credit scores based on credit repayment history and utilize alternate data instead.
- AI will enable smarter lending.
- The transparency and security of Blockchain will benefit customers by eliminating manual processes and considerably reducing the time of transactions. The shift to the blockchain will increase banks’ reach to small and medium enterprises.
- Customer experience (CX) and Operational efficiency are important drivers of digital transformation: As COVID-19 reshapes customer expectations and competition heats up, banks are focusing on improving operational efficiency and CX to better serve customers across all touchpoints.
- Banking-as-a-service (BaaS) emerges: BaaS is an end-to-end process that enables third parties to directly connect with banks’ systems so they can build products on top of the banks’ regulated infrastructure. In 2021, BaaS will likely see a surge.
- Information security to become of paramount importance: The growing popularity of remote operations means an increased exchange of critical and sensitive information, especially financial data, between banks and customers on the cloud. Cybersecurity and access management are going to play a major role in sharing secure and verified customer and financial data. Blockchain technology is emerging as a critical enabler of information security and can be leveraged to verify customer data at multiple touchpoints.
- ‘Hi-tech & hi-touch’: The ever-evolving high-tech world has left humans desiring for high-touch — the involvement of personal attention and service. High-touch refers to situations where trust between the customer and employed individual is necessary. And with the growing influence of millennials — both customers and new-age banking employees — personal touch will be key in maintaining valuable relationships in the banking sector alongside the evolving technologies. Going forward, any organization that will have both the capabilities of being ‘high-tech’ and ‘high-touch’ would be a winner.
- The rise of Hybrid banking: In 2021, banks that take advantage of the efficiency, flexibility and convenience of digital banking while harvesting the benefits of personalization, relationships and in-person experience that digital self-service cannot provide, will succeed.
Redefined Future of Work:
- Upskilling to become business imperative as organizations recognized the significant skills gap caused by a shift of consumer engagement to digital channels.
- Beyond reskilling, most observers do not foresee a return to traditional corporate office spaces soon. Remote work to become prevalent as companies find ways to reduce costs to better compete with digital organizations.
2021 is going to see a renewed focus on automation and the emergence of connected banking. Banking operations are going to become more agile, with an increasing need to access data anytime, anywhere. The way forward will be a close collaboration with healthy competition. Let’s hope 2021 sets new landmarks for the banking ecosystem.
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