Online and mobile banking have become the primary financial engagement channels for many consumers. Therefore banks must devote more time and resources to keeping up with the newest trends in digital technology and changing consumer behaviour if they want to be relevant and competitive.
Fintech companies must recognize the value of incorporating digital finance solutions in order to improve efficiency, service, and, ultimately profitability. As a result of utilizing digital solutions, the digital banking sector may experience rapid growth, with the following trends likely to determine its future:
Financial institutions can use blockchain to conduct cross-border transactions more quickly, cheaply, and efficiently. FinTech already has a stronghold on it and is putting the inter-banking mechanisms to the test.
Furthermore, payment companies like Mastercard and Visa are looking towards implementing blockchain, with other businesses already reaping the benefits.
More banks are inclined to offer customer-centric, simple, and easy-to-use digital banking apps in order to stay relevant and competitive. This indicates that more digital banking apps are likely to be with:
- Simplified User Experience – It is built around real-life customer journeys, removing friction from the user experience and allowing users to smoothly switch between digital and physical banking channels.
- Simplified Functionality – This focuses on delivering value to the clients rather than just adding new and flashy features and services. Hence, changing the priority away from a ‘features first’ strategy to a ‘user-first’ philosophy.
- Simplified Language- This means that when it comes to dealing with digital banking, there is a lower barrier to financial literacy, making it easier to understand and utilize for consumers.
Internet of Things
Making it easier for customers to utilize the services provided by the bank from different platforms around the world as they interact with many smart devices throughout the day. Banks can use the Internet of Things to connect all of these devices, allowing consumers to manage their accounts from the comfort of their sofa using smart speakers or while jogging since they are wearing a smartwatch on their wrist. Furthermore, by becoming a part of their daily routine, banks will gain a greater understanding of their clients.
Banks are developing new micro-segments based on lifestyle, values, aspirations, needs and targeting them with specific offers. Lifestyle banking also focuses on providing consumers with non-financial experiences that help them improve their lives, as well as integrating banking products and services into these experiences.
This method has the advantage of allowing banks to become a more integral part of their customers’ lives, resulting in increased customer engagement and the potential to get better consumer insights.
The digital banking industry may enter a phase of collaboration, in which legacy banking partners with FinTech rather than competing. As a result, open banking, neo banking, agent banking, and other similar banking models will become increasingly prevalent.
In both the current and future digital environments, banks that can transform themselves into truly effective digital organizations and embrace changes in digital technologies and consumer behaviour will not just survive but thrive in their respective fields.