Trends Impacting the Financial Services Industry

Trends Impacting the Financial Services Industry
Two women discussing their finances in cafe, they using mobile banking app

In 2020, nearly everyone changed their lifestyle in one way or another. Those lifestyle changes were reflected in the way people chose to conduct business and make purchases. Many of these changes are technology-driven and are here to stay. Additionally, a more personal approach to some financial institution’s business practices has enhanced the customer experience. These changes have made a positive impact on the lives of many, and aren’t going anywhere anytime soon. Those in the financial service industry would do well to get on board with them to grow their business.

1. Heavy Reliance on Technology for Lending

As online lenders increase their market share, traditional banks need to become more innovative in how they utilize technology to provide funding. With online lenders reviewing loan applications within hours, traditional banks must find a way to compete in order to thrive in the lending industry. Experts in the financial services industry such as Michael Canzian can provide tips on remaining competitive in this ever-changing financial landscape.

2. Personalized Insurance

As fewer people have been on the road, insurance companies have lowered rates for drivers who significantly reduced their road mileage. Further, health insurance companies have had fewer elective surgeries to foot the bill for, and have therefore lowered rates for some customers. Offering this level of personalization requires technological infrastructure and data analysis. 

3. Increased Telecommuting

Those working in the financial services industry have drastically increased the rate at which they work from home. This trend is unlikely to change going forward, and employers will need to invest in the technological infrastructure to support employees as they work from home more often. Interactions between staff and customers must be seamless, so the technology to support these interactions will be a worthwhile investment.

4. Contactless Payments

Cash is becoming antiquated as contactless payments are now the method of choice for the majority of customers. Biometric access control is likely to become more popular in the near future. This will include facial and fingerprint recognition. 

5. Chatbot Usage

Chatbots save employees’ time on easily resolved issues, so it is in a financial institution’s best interest to utilize them. With quick-fix issues solved by chatbots, employees can use their expertise to solve more complex issues. Further, consumers enjoy the fast-faced experiences chatbots offer them.

5. Robotic Process Automation

Robotic Process Automation (RPA) can take care of many financial service industry administrative processes. These processes include data analysis, security checks, bringing customers onboard, and risk assessments among others. Like with chatbots, RPA will free banking institution’s employees to spend their time on more complicated issues rather than going through the motions with administrative tasks.

Technology is the way forward for financial service institutions. Those companies should be on the lookout for growing their technological infrastructures in order to support the increased technological traffic. Further, financial institutions need to be on top of up-and-coming technology to ensure they aren’t left behind with old-fashioned business practices. Keeping a finger on the pulse of trends is essential to the survival of financial service organizations, especially smaller organizations.