Banks today don’t look the same as they did ten years ago, or even one year ago for that matter. The digital disruption continues to shake up the financial industry year after year. Today’s consumer knows that secure, mobile-banking is a given and they want more innovation, choices, and access. Look for these six innovative banking trends to continue to gain traction and take shape in 2019.
Top companies know that customer experience is a critical differentiator in today’s market. In an industry such as banking where consumers might perceive that ‘all banks are the same’, innovation, trust, and branding can lead to improved customer satisfaction, helping a financial institution pull ahead of its competitors.
Financial institutions looking to experiment with new products, technology, and communication will utilize innovation labs in 2019. Innovation labs are helping businesses to really understand a customer’s experience and receive honest feedback. With both physical and virtual locations, companies invite their customers in to test drive new products and technologies. Customers feel valued because they have the opportunity to not only give their opinion but see the real-time changes based on their feedback.
Traditional Banks Partner with FinTechs
In 2019, customers will see more relationships bloom from traditional but trusted banks partnering with innovative but inexperienced FinTech companies. Traditional banks are finding more efficient methods to integrate new technologies and product offerings by partnering with FinTech companies. Instead of having to invest time and money to develop their own technologies, big banks can partner with newer FinTech startups for a fraction of the cost. In addition to the time and money that are saved, big banks enjoy a newer, younger, and fresher customer base that comes rolling into from their FinTech partner. In return, FinTech startups are receiving their much-needed capital and regulatory compliance that the big banks can provide.
Around the world in places like the UK and Australia, open banking was a hot topic in 2018 with open banking regulations already put in place or with plans to do so in 2019. Open banking works on the premises that when consumers provide affirmative consent, their financial data can be made available to third-party platforms allowing financial institutions to compete directly to provide the best services and rates to consumers. Although the US lags behind in any type of open banking policies or regulations, the demand is building. In 2019, expect FinTech companies, financial institutions, policymakers, and even consumers to start the conversation on open banking in the United States.
Expansion in Digital Payments
The volume of non-cash transactions like eCommerce and P2P payments are soaring not just in the United States, but worldwide. In 2019, look for banks to cash in on a first-mover advantage or to collaborate with third-party e-payment companies as they seek to carve out their own digital payment niche. In the near future, banks will want to work closely with existing providers of e-wallets like ApplePay or PayPal to make sure their products have top visibility with consumers using these e-wallets. However, the long-term goal in the banking industry will be to build its own fast and frictionless payment infrastructure for its consumers.
In 2019, Artificial Intelligence (AI) isn’t a new concept to consumers. Virtual assistants like Siri and Alexa are already household names and consumers feel comfortable with them. In 2019, AI will provide consumers will notably more personalized experience. Consumers might even have a hard time differentiating AI bot from real humans. AI assistants will increasingly walk consumers through procedures such as password resets, customer identifications, and other simple but common customer service procedures.
Growth of Biometric Authentication
Once seen as a “nice to have” or a novel feature, biometric authentication is advancing in sophistication and making its way into the mainstream for financial institutions. Mobile banking is now the status quo of consumer banking, but with that comes issues on how to properly protect consumer data for a secure and safe experience. With biometric authentication as a known quantity, consumers are not only prepared to adapt to biometrics in lieu of passwords, they are demanding it.