Digital Banking Trends of 2021
COVID-19 has definitely shaped the banking industry landscape and disrupted its traditional roles; which is safe to say, was not something any of us were anticipating.
Following the pandemic, banks had to learn how to sustain themselves and adapt to the changes brought about by the new environment. Doing away with traditional practices, moving from paper-based to digital solutions, shifting to a customer-centric approach is helping banks to fight the growing competition and demands. In order to assure that these implementations are successfully adopted, banks are also looking to up-skill their existing employees to enable them to work seamlessly and efficiently.
In the end, all banks are counting on these changes to boost efficiency, productivity, creativity, collaboration while offering the highest levels of customer experience possible. So, what were the crucial shifts in 2021 that have reshaped the banking industry?
Let's take a look at the top 5 Digital Banking Trends of 2021.
This year, more banks have started adopting a digital-only model. This enabled customers to make use of banking services without having to visit a physical branch and wait in line, ultimately allowing customers to save time and avoid dealing with cumbersome paperwork.
Research has shown that the number of visits to banks will drop by 36% by 2022 as digital-only banks become more prevalent. Faster e-payments, the ability to complete financial transactions from anywhere and at any time, real-time analytics and updates, and seamless services are some of the major benefits of digital banking.
As organizations look to improve efficiency and streamline processes, they will increasingly adopt technologies such as artificial intelligence and machine learning.
Dynamic Consumer Behavior
The rapid emergence and evolution of digital technology have changed the way people interact with banks and financial services. The increased use of these services has led to a reduction in the number of face-to-face interactions between banks and customers.
The customer expectations have become more demanding, which has put pressure on businesses to meet these demands. Despite the challenges of transitioning from a physical model to a virtual one, many banks have seen positive results. Adopting cloud solutions and agile business processes have had a positive result on banks leading to improved customer retention.
Increase in Cloud Appeal
Cloud computing has become an integral part of banks' strategy to create agile businesses and reduce costs. The cloud is more than an efficient storage solution—it's a unique platform for generating data and innovative solutions to leverage that data. This intense focus on adaptability has facilitated a form of service-oriented thinking previously thought to be unattainable. The ability to specialize has expanded, allowing organizations to innovate their business models and processes in pursuit of their core competencies and business goals without compromising on agility.
Sustainability in Focus
Sustainability is a strategy that focuses on the management of a company's operations in order to create long-term value. As the expectations on corporate responsibility increase, and as transparency becomes more prevalent, companies are recognizing the need to act on sustainability. Professional communications and good intentions are no longer enough. Beyond the individual banks, the focus on sustainability is also significant for bank conglomerates. In fact, many large companies are already developing their own forward-looking plans for addressing this issue.
It is really becoming clear that sustainability is a megatrend that simply isn’t going away!
With the increase in health regulations (ie social distancing) surrounding COVID-19, customers have shifted their preference towards digital (at home) transactions. This has caused an increase in businesses adopting various electronic payment methods.
Digital transformation helps minimize risk and improve customer experience. Its robust security measures help minimize fraud and ensure the safety of the customer's and banks' money. Customers can use two-factor authentication and the PIN/OTP feature that enables cashless transactions.
Following the surge in digital adoption that we've seen this year, one can already make the necessary prediction for which changes we will see in 2022.