In the past decade, banks and credit unions have faced stiff competition from developing technology-based product line. Opposition banks and new technologies have endeavored to disrupt current banking relationships and customer's financial habits. In order to stay in the competition, banks and financial institutes are struggling to align with the shifting consumer behaviors and expectations. Here are the latest trends and technologies that are expected to impact the digital banking sector in the upcoming years.
Expansion of Digital Banks
For the past few years, neobanks have been targeting millennials, fintech companies focused on business liquidity, and popular tech giants. These tech bigwigs too have penetrated the financial services landscape competing with the new entrants. Because of these disruptors, more banks, and fintech organizations are deploying digital banking systems attracting more customers, millennials in particular. Today, fintech is an effective way to gain deposits and perform crucial core banking actions. To be successful in the race, both digital banks and fintech institutions have to ensure that they provide the most convenient and intuitive digital experience to their customers.
Gig Economy and Small Businesses
Small companies or businesses represent 99% of the total businesses in the USA. Despite being a trusted local partner for several companies, banks, and financial institutes, these small enterprises fail to offer effective solutions that are specifically built for the consumers. This forces businesses to rely on replicated versions of popular retail solutions. Such organizations can enhance their revenue opportunities and increase business growth by adopting new technologies like Mobile money, mobile wallet and digital banking.
Any financial institution that provides the best solution to these gig economy contributors helping them manage their financial health, will attract new customers and expand the existing ones. Institutions therefore have the onus of rapidly delivering digitally optimized, intuitive experience to entrepreneurs and gig works, or they may lose these relationships and chances to grow revenue.
Digital Transformation in Banking
The current trend towards digital-first banking speaks of a significant shift in thinking. Generally, institutions work in silos, generating complexities and incurring extra expenses in the back office apart from conflicting and frustrating customer encounters. Legacy technology obstructs the organization's capacity to innovate rapidly, making it hard to stay ahead of the new market entrants. In the future, several institutions will simplify and streamline channels by utilizing tools like API Layers, to connect clients and member profiles, thereby reducing the operational costs and generating a comprehensive and steady banking experience.
The Client Experience Battleground
Services like Apple Cards and Uber money show how critical the customer experience is in the fight to attract, retain, and expand the customer base. With the new innovative payment options available, customers can apply with minimal data entry, making the on-boarding and verification process quicker and smoother. This experience has built up another standard against which all banks and credit unions will be judged in 2020 and beyond. CareerBuilder recently reported that 78 percent of the U.S. workers live paycheck to paycheck to make ends meet. Buyers necessarily can't stand to face challenges for their financial health. This provides immense opportunity for the traditional organizations to keep up and win market share over the non-traditional contenders. And what can amplify their chances at this opportunity? A digital experience that appeals to the millennials.
In and beyond 2020, banks and credit unions will need to re-credit their digital strategies to remain in the stiffer market. They need to improve their processes services providing mediums and improve the overall client experience.
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