The financial services industry is undergoing a digital transformation driven by the evolving needs and expectations of customers. To remain relevant in a quickly changing landscape, traditional financial institutions are starting to adopt emerging technologies. If you own or manage a financial institution, integrating some of the emerging trends in the financial services sector could help you increase your efficiency and ensure customer loyalty into the future.
Emerging Trends in Customer Service
Self-Service Digital Channels
Whereas financial institutions traditionally operated out of physical branches with paper deposit forms and cheques, customer preferences are leaning towards self-service mobile and online banking solutions that allow them to perform routine banking tasks remotely.
In this context, banks can deliver superior customer experiences by providing an interface that allows customers to perform banking tasks quickly, easily and securely, including:
- Bill payments
- Peer-to-peer transactions
- Applying for loans
- Voice commerce
To provide seamless customer service, financial institutions are integrating emerging technologies such as chatbots powered by artificial intelligence to answer preliminary queries before redirecting customers to a live customer service representative. Chatbots not only save time answering basic and repetitive questions, but they can also provide basic services to customers outside of business hours.
Chatbot Tip: Keep a Human in the Loop
If you integrate chatbots, be sure to make it clear to customers whether they are messaging with a robot or a live person. It’s also important to have someone there monitoring the chats to make sure that customers with complex queries can have their issues sorted out promptly. There’s nothing more frustrating than being misunderstood by a chatbot and not being able to reach out to someone who can actually help!
Partnerships with FinTech Companies
At their inception, the new and emerging technologies offered by fintech companies were seen as a threat to banks. However, today, we’re seeing financial services companies team up with fintech companies to offer their customers a wider range of tech-enabled banking products. From secure multi-currency payment gateways and merchant services to cross-border payments and loan servicing, teaming up with fintechs—including payment processors and mobile bank services—can allow you to offer customers a broader range of financial services.
Emerging Trends for Increased Efficiency
While the first two trends focused on customer preferences, some of the other emerging trends in financial services are focused on operational efficiencies. In the face of new regulatory requirements and strict data protection laws, performance pressures compel lenders in the financial services industry to automate some of the required tasks to free up their staff and keep operating margins healthy.
Robotic Process Automation
One of the emerging trends in financial services today is to use software robots to complete repetitive processes that follow a consistent rule. Rather than having a human spend all of their time on repetitive mechanical data entry, copy/paste tasks, regulatory compliance, credit checks and address matching, software robots can be given rules with the structure “If this = then that,” and they’ll perform the task correctly and efficiently while staff members focus on customer service and other value-added tasks.
Whereas software bots perform simple, repetitive tasks, artificial intelligence software can be trained via machine learning to process and analyse vast quantities of data and alert staff in real time when there is an opportunity or a threat. For example, AI is being used in the financial services industry to:
- Provide advanced fraud detection and prevention in real-time
- Block cyber criminals and malware that has just been discovered and reported in the news elsewhere
- Identify favourable investment opportunities
- Trade currencies automatically as soon as a certain exchange rate is reached, via sensors
Given the fact that financial services now operate on a global scale, with cross-border transactions happening 24/7, it’s easy to see how important it is to have digital tools working for you to keep your team up to date with threats, opportunities and breaking news updates from around the world that could have an impact on your customers.
Emerging Trends for Increased Security
International transactions also come with a need for increased security to prevent sensitive data from falling into the wrong hands. In addition to end-to-end encryption, fraud protection and PCI-DSS compliance (these are just the basic essentials), there are two emerging technologies that are helping banks address security issues to keep their customers safe while allowing them to enjoy a wide range of digital financial services.
Financial institutions that offer credit card services need to ensure that the people using the cards they issue are the owners of those cards and not fraudsters or identity thieves who managed to obtain the card numbers or physical cards. For enhanced protection, e-commerce merchants and fintech companies typically use several kinds of authentication in addition to a username and password, including:
- Secret questions and answers
- Card verification value (CVV)
- Address verification service (AVS)
- A code sent to the customer’s email address or phone
- A physical security token or code-generating app
Additionally, customers who use mobile payment apps often use biometric-based authentications such as fingerprint, iris scan or facial recognition. Telephone banking customers are typically asked to choose a secret word. All of these added steps help to filter out unauthorised users and ensure the cardholder is who they say they are.
Blockchain is a secure, emerging technology that is currently being used in the financial sector for cryptocurrencies like Bitcoin, smart contracts and peer-to-peer lending. While it’s not widely available to the public yet, we can expect to see blockchain services enabling banks to offer a wider range of secure digital tools in the future. For now, the best way to offer blockchain-powered financial services is to partner with fintech companies that are already using it.
Emerging Technologies Are More Accessible than You Might Think
As competitive forces demand that banks offer targeted services for digitally minded customers, local and national banks are being forced to explore new technologies and tools. However, banks don’t necessarily need to reinvent the wheel to stay relevant in a changing financial services landscape.
After conducting market research and identifying the emerging financial services trends and financial technology trends that are important for your customer base, you can simply look for a financial technology company that can partner with you to achieve your goals. While you continue to focus on your existing customer relationships, your technology partner can integrate the digital services your customers need—ensuring customer loyalty, increasing satisfaction and driving growth into the future.