In 2021, the financial services industry has been defined by a sudden acceleration of digitization and digital engagement. The impacts of the COVID-19 pandemic have pushed this. Exchanges have closed their trading floors and switched to remote trading. Mobile banking transactions soared, personal trading apps saw record trading volumes, and call center staff maintained customer support by working from their living rooms.
Kristina Antonorsi, an entrepreneur from Venezuela, believes that while the financial services sector may weather the digital tsunami and continue operations, it has become clear that the winds of change are not fleeting. Financial institutions are now thinking strategically about their technical setup and wondering if the tools they relied on before are the right ones to use in the future. A few major themes are likely to shape the financial services industry in 2022.
Modernizing outdated core systems will be imperative
One of the most important trends is the need to modernize core systems. These systems must be agile and scalable to meet market demands. If these systems are not updated, organizations could be left behind in the competition.
Additionally, the demand for technology continues to grow. Kristina Antonorsi believes that as companies move towards technology-focused entities, they are creating more allied roles that have a strong technology focus. These roles contribute to the overall growth of new technologies, increasing business productivity and revenue streams.
Additionally, growing consumer sophistication is fueling the need for organizations to focus on digital. Organizations can create more efficient core systems relevant to their markets by paying attention to these trends.
The bank goes beyond cash with digital engagement
The bank is going beyond cash with digital engagement, as contactless payments are already a way of life in Europe and Asia. Even in America, 27% of American businesses reported an increase in contactless customer payments due to the pandemic. Kristina Antonorsi believes this trend will continue in 2022, with 74% of global consumers saying they will use contactless payment methods even after the pandemic. Globally, the contactless payments market size is expected to grow from $10.3 billion in 2020 to $18 billion by 2025, at a compound annual growth rate (CAGR) of 11.7% during the forecast period.
According to a survey by The Economist Intelligence Unit, this trend is mirrored in the financial services sector, with a quarter of consumers planning to open their bank account online or via an app this year; according to the survey “The Economist”, Intelligence Unit. According to other studies, 37% of US millennials already use mobile banking apps, while only 16% used online banking in 2018, up from 10% the previous year. Digital engagement will continue to rise among consumers and businesses in 2022 as more people seek complete ease of use when managing their finances digitally. 70% of global consumers who use financial apps say they want them to update automatically on every device they own (the number is about the same globally).
Insurance becomes personal
As 2022 approaches, it is clear that the most successful companies in the financial services industry will be those that can customize their products and services for their customers. Kristina Antonorsi believes this means building a technology infrastructure that can quickly process large amounts of data from a variety of sources to provide real-time insights.
AI-powered data analytics will be key to creating contextualized interactions with customers throughout the insurance lifecycle, from sales and underwriting to claims management and support. So if you’re looking to stay ahead of the game in the financial services industry, be sure to research ways to customize your product or service offering.
Institutional and wholesale trade leaves the trading floors
The wholesale industry is moving away from traditional trading floors and digital commerce. This change is driven by new technologies that allow traders to work anywhere, regardless of their location. This change will require financial institutions to update their operational resilience plans to account for global and regional infrastructure failures.
Work from home must work in all financial services
Working from home must work in all areas of the financial services industry to be effective. Throughout 2021, widespread stay-at-home restrictions have challenged businesses around the world to keep employees engaged, productive and connected. With the pandemic, as corporate offices became unavailable overnight, the entire financial services workforce – from merchants to bankers to support staff – relied on their home internet connections as well as existing VPN and virtual desktop infrastructure solutions to do their jobs. Although the work was done, the ability to maintain a constant connection with the office was of no benefit if employees could not respond to requests or resolve issues quickly.
Embedded innovation is the new status quo
Embedded innovation is the new status quo for financial services institutions. 2021 has proven that agility and innovation, done right, is a game-changer, and the speed at which the industry has transformed to help its customers through the pandemic is the speed at which it wants to keep operating. To create a culture of innovation embedded in an institution’s corporate culture, financial services institutions need to work with providers, regulators and supervisors to create safer, cheaper, more inclusive and secure financial markets. fairer. At Google Cloud, we work with our customers across all financial services to help them prepare for the future through our technologies, tools, and innovation partnerships.
The most successful companies in the financial services industry will personalize products and services for their customers. This means building a technology infrastructure that can quickly process large amounts of data from various sources to provide real-time insights. AI-powered data analytics will be key to creating contextualized interactions with customers throughout the insurance lifecycle, from sales and underwriting to claims management and support. So if you’re looking to stay ahead of the game in the financial services industry, be sure to research ways to customize your product or service offering.
This article does not necessarily reflect the opinions of the editors or management of EconoTimes