According to The FinTech Times, 24% of US citizens already rely on digital-only banking, while only 34% of people under 35 years of age carry cash with them at all. Similarly, Business Insider reports that 40% of retail banks heavily invest in IT development and digital infrastructure upgrades, while 61% of people do thorough research on a bank and its digital features before settling to use their services altogether.
There is a clear push toward digital banking transformation from both the clients and the FinTech industry, facilitating a melting pot of new trends and development on the horizon. With that said, let’s take a look at several of the most prominent digital banking trends which will shape 2020, as well as some of the most prominent reasons why you should look into them in regards to your own business going forward.
The Influences of Digital Banking Transformation
In order to get a better sense of what digital banking transformation can do for your business, we need to discuss the advantages of implementing new industry trends into an already functional business model. Joseph Murphy, Head of Finance at Subjecto had this to say on the topic: “Offering your clients competitive benefits, unique features and loyalty incentives in the shape of evolving services and security is essential for success in today’s FinTech. Whether you started as a digital-first firm or have adopted digital banking features along the way, putting more resources and time into that segment of your business model can be a crucial turning point for your success.”
For better or worse, each FinTech business seems similar to the one across the street to a layman or a standard B2C client. That’s why digital banking and its transformative trends can be highly influential and bring about several important benefits to your business, including the following:
- Higher client retention and positive word of mouth
- Streamlined operational and decision-making processes
- Extended industry reach and higher brand authority
- Lowered margin for error and cybersecurity risks
- Better and more frequent B2B networking opportunities
Digital Banking Transformation Trends for 2020
1. Blockchain Data Management
While it started its life as a means to track cryptocurrency exchange, blockchain has found its place in a plethora of industries and cloud platforms. Its unique take on data tracking and information management makes it more than viable for increased digital banking safety of clients across the globe.
Both traditional banks and FinTech startups can look forward to a growing presence of blockchain on the market as we move into 2020. Its implementation will mark a safer, more transparent transaction market, allowing both B2C and B2B stakeholders to utilize banking platforms to their fullest.
2. Mobile-Only Banking
As we’ve previously mentioned, many people have decided to go mobile-first with their banking activities due to convenience and accessibility. This creates a development opportunity for FinTech businesses with aspirations to create their own mobile banking platforms which will cater to a plethora of people with their day-to-day needs.
Traditional banks are also poised to increase their presence in the mobile banking sphere due to necessity and the requirements of their clients – a field in which smaller FinTech firms have an upper hand in. Regardless of the scale of your business or the primary business model you’ve adopted, mobile-only banking features should be on your development radar in the near future.
3. AI-Driven Security
Given the more accessible and versatile nature of digital banking, cyber intrusions and social engineering hacks are bound to rear their heads. However, implementing AI algorithms which will notify the user of any and all access attempts, changes or transactions being made with their account can amend that.
To go even further, AI algorithms could potentially learn which use patterns are commonly associated with any given user, registering them as positive interactions while being suspicious of other events. AI will no longer be relegated to analytics in 2020 and serve as a cyber barrier for digital banking which will ensure safety of user data more than any other automated system.
4. Chatbot Client Servicing
Speaking of AI and its continued presence in the digital banking industry, chatbots are also bound to appear more frequently in the FinTech client servicing sector. These machine-learning algorithms will be able to assist new and recurring clients in regards to any FAQ related to your business around the clock.
If an issue becomes too much for the AI to handle, your representative can take over in a curated fashion and dedicate their fullest attention to that particular client. Mobile banking apps alongside digital cloud banking browser services will both see an influx of chatbots which will undoubtedly help all generations transition into a digital-first banking environment in 2020.
5. No-Card Transactions
Even though cash might not be commonly used today as it was a decade ago, people still carry credit cards in their wallets. More than ever before, even credit cards can serve as possible social engineering flaws and lead to illegitimate account access attempts.
Thus, digital-first banking will allow its users to carry out POP and POS purchases via QR codes and different no-card means going forward. This will allow banking businesses to go green and focus on their mobile banking services without relying on physical cards for client servicing in 2020 and beyond.
6. Biometric Identification
Speaking of security features and minimizing illegitimate banking access, biometric identification will make a mark on the FinTech industry in the near future. Fingerprint, eye as well as facial scanning are only some of the possibilities which can be integrated into mobile banking apps (with the clients’ explicit permission).
This would effectively make any social engineering or brute force attacks void and allow for much higher levels of safety even if a phone or a laptop gets stolen from the client. Likewise, biometric identification methods would make passwords outdated due to their habit of being forgotten, making this the perfect development choice for digital banking businesses with a varied clientele demographic.
7. Streamlined Client Billing
Bills, taxes and life expenses are something we are all used to regardless of where we live. While these expenses are a necessity and our obligation as modern citizens, their analogue, paper-based nature is slowly becoming obsolete.
Digital banking can allow users to simply visit their platforms of choice and pay for any due bills with a click of a button. Similar to credit cards, this would also increase the green factor by making printed paper outdated and allow for much more convenient client billing in 2020 as a result.
Lastly, digital banking and its accessibility have been a point of contention for years due to the sheer variety of generations and backgrounds using them. Voice-assisted banking features can effectively bridge that proverbial gap by allowing clients to use their voices in navigation, chatbot interaction and transactions respectively.
This would make sensitive touch-screen or browser-based platforms more flexible for elderly and less tech-savvy clients while also leaving the door open for hands-on digital banking if the client chooses it. As a plus, voice-assisted banking can also be voice-locked, making it register only the client and his or her own commands, further improving the security features of any given digital banking platform in 2020.
Digital on the Rise (Conclusion)
Whether you work in a traditional banking institution or own your own FinTech startup, digital transformation is poised to make a large impact on the industry with 2020 on the way. Make sure to audit your current business model, look for potential transformation bottlenecks and find meaningful applications for these and other coming trends before implementing them. That way, you will ensure the satisfaction of your clients and the security and stability of your business’ infrastructure while also upgrading the quality of your services to everyone’s advantage.
Author-Bio Marques Coleman is a blog writer at EssayAssistant and WriteScout. He specializes in marketing and copywriting. Moreover, he is an avid traveler and always tries to learn something new.