In the last 10 years, there has been swift growth in the fintech industry (the industry that creates programs and technologies that support banking and financial services companies). The technology has been fully adopted by financial services in the past
several years and it is now integrated within most financial institutions’ operations.
Fintech can basically be found in every sector including data management, administration and customer experience. Large banks around the world have welcomed and adopted fintech and have even begun to lead the transformation and setting standards for new
financial service organizations to follow.
Therefore, in 2021 there is a huge expectation to see smaller institutions providing and perfecting currently existing technology in order to keep up with the larger institutions. Here are the latest fintech trends to watch out for in 2021 and beyond.
Artificial intelligence (AI) and robotics
The new trend right now is automation and, so far, it’s been mostly used in customer service applications. Now it’s going to be used even more to include investments, compliance, risk management, analytics, basic accounting, mortgage lending, loan and credit
card processing, logistics plus supply chain management. Customers can now expect faster and more accurate services tailored to their needs.
Better chatbots
More financial service institutions are deploying chatbots and artificial intelligence to improve customer experience and automate processes. While freeing up humans to provide better and more personalized services, the chatbots interact with customers in
real time to give them the information that they need when they need it, leaving them with high customer satisfaction.
People can expect to see many improvements in the way chatbots work as artificial intelligence is making it easier for them to act more like humans. Chatbots will most likely be more able to improve their understanding of conversational language (slang)
and improve upon their grammatical errors.
Improvements should also be seen in the way services will be provided, based on information gathered in 2019 through conversations between chatbots and customers.
Voice recognition
AI has helped to improve voice recognition, the ability of a software algorithm to match the identity of a person to his voice. Banks have been testing voice recognition for a number of years and have been perfecting it. In 2021 voice recognition will probably
be used a lot in customer service as smart home devices increase the demand for, and the use of, hands-free banking and voice search.
Instead of having to remember passwords or having to give all their credentials on the phone, customers can be verified through their voices when they call the bank to make payments or to transfer money or to report a lost card.
There is a possibility that institutions that focus on voice recognition will become more popular as customers adopt the technology due to its convenience.
Adapt to millennials’ needs
In the last ten years, financial institutions realized that millennials’ financial goals are completely different from those of the older generation. They are more likely to seek rent-to-own agreements, mortgage, and debt management solutions more than they
will seek business loans. Institutions are more likely to use the current technologies to satisfy the millennials who will be at the forefront of banking.
Software-as-a-service cloud services
Financial institutions are already using cloud services for human resources, customer relationship management (CRM) platforms and data storage. There is now a move, in 2021, towards using the services for cross-border data exchanges, billings, payments,
and loan management for faster and smoother services.
Better online banking services
The great majority of banking customers prefer online banking to standing in the queue at the bank. Therefore, banks will most likely provide several ways of accessing their banking platform online. Some customers also prefer blockchain-based sharing economies
so many banks will have to adopt the technology to improve online identity management, speed up cross-border payments, and to process commercial transactions faster.
Security and protection
While the above trends improve the quality and speed of services, they increase security concerns and the risks of cyber-crime. AI has already helped with fraud prevention and identify theft reduction, but cyber security will be of great concern as technology
advancements bring new risks. In 2021, financial institutions will be forced to invest heavily in cyber security.
Future potential
These are just some of the trends to be expected in 2021 and expect many more in 2022, and beyond as technology continues to disrupt the banking and financial services industry for the better.
Author bio:
Luigi Wewege is the Senior Vice President, and Head of Private Banking of Caye International Bank headquartered in Belize, Central
America. Outside of the bank he serves as an Instructor at the FinTech School in California which provides online training courses on the latest technological and innovation developments within the financial services industry. Luigi is also the published author
of: The Digital Banking Revolution, which is available in audio, kindle and paperback formats throughout all major international online bookstores – now in its third edition.
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