5 financial services tech trends to keep an eye on in 2020
The tech revolution in financial services continues to evolve, coaxing organizations to change and grow along with it. The New Year and next decade will only present the industry with fresh challenges and greater opportunities.
What trends should you keep your eye on in 2020?
We have a few thoughts.
The big 5
1. The transformation of digital transformation
A renewed focus on customer experience has changed the digital transformation conversation. While digital transformation once defined the evolution of business processes from manual and paper-based to electronic, the term has now become the foundation for the modern customer experience.
Here’s the twist. Even though customers want the option of banking through the channels they are most comfortable with, they still enjoy visiting the branch and talking face-to-face with professionals. In fact, customers who use mobile and digital channels to do banking at least once a week are 60 percent more likely to be active branch users, according to a McKinsey & Company survey.
So how does digital transformation help employees deliver great service when they are face-to-face with customers?
Simple. Access to information – a complete view of the customer, if you will – gives employees the power to answer questions, solve challenges and offer opportunities faster and more efficiently than ever before.
2. What’s the big idea about intelligent automation?
In many trends pieces, you’ll read a lot about artificial intelligence (AI) and how it will fuel industry growth.
Expect to learn about AI’s speech recognition, learning, planning and problem-solving capabilities, but pay careful attention to the benefits of robotic process automation (RPA). Robotic process automation is the deployment of software robots to significantly reduce the time, resources and errors associated with tasks that require workers to “swivel” in their chairs when changing focus between screens, systems and third-party information sources, like websites.
Both technologies fall within the technology realm called intelligent automation (IA). Deloitte defines IA as the combination of automation and artificial intelligence.
At its most basic, IA takes a “doing” role, focusing on automating tasks. At its most complex, IA takes a “thinking” role, focusing on data-driven work that requires deduction and analysis.
Intelligent automation is already changing the way institutions interact with customers. Take, for example:
- Chatbots
Organizations use them for customer engagement – answering questions and making recommendations
- Analystbots
These bots detect fraud and help manage risk by analyzing portfolios and transactions much faster and more accurately than humans
- Compliancebots
This solution keeps track of laws and regulations in real-time, ensuring your institution is complying with regulations
Artificial intelligence can also affect the bottom line. Chatbot technology will deliver $11 billion in annual cost savings for banking organizations by 2023, according to a Juniper Research report.
3. Keeping up with RegTech
Financial institutions face a complex, ever-expanding regulatory landscape. Hundreds of regulatory bodies throughout the world publish thousands of policy rule books and expect organizations to maintain compliance with the rules therein.
This becomes an expensive and time-consuming task. Financial institutions are committing 15 percent of their employees and 10 percent of their annual revenue to keep up with regulatory requirements, according to Global Regulatory Outlook 2018, by Duff and Phelps.
If an institution fails to keep up, the back-end is expensive, too. There can be litigation, licensing implications, damage to the corporate brand and fines.
To keep up and move ahead, institutions large and small are turning to RegTech companies to help solve regulatory and compliance challenges. RegTech employs innovative technology solutions to reduce costs through a combination of decreasing time spent in pursuit of compliance and preventing fines resulting from non-compliance.
Other RegTech benefits include:
- Automates compliance processes
- Acts as a source of governance
- Provides transparency and risk management through reporting
- Reduces the need for manual intervention
- Enables better data analysis to quickly identify and remedy risks
4. The power of the platform ecosystem
Financial institutions are also embracing the power of the platform ecosystem. A platform ecosystem is a type of industry or market structure in which a central software solution or stable core mediates the relationship between a wide range of complements, such as software applications and core software systems, and prospective end-users.
Digital Trends’ Tom Hardin further defines it as ecosystems comprised of people, data, companies and processes connected by the shared use of digital platforms.
By building platform ecosystems through integrated software solutions, financial institutions are making information easily and quickly accessible to both employees and customers. For employees, this means immediate access to client information in real time, regardless of where the information originated. They have a complete view of the customer, which allows them to forecast client needs and answer client questions quickly.
Meanwhile, integrating line-of-business solutions like Salesforce and Redtail with a robust content services platform also allows business processes to run more efficiently, empowering users to retrieve the information they need, when they need it, while remaining in familiar applications.
More and more companies, both B2C and B2B, are moving to a platform ecosystem structure. They’re doing so as customer experience and interaction becomes a critical competitive differentiator for organizations in nearly every industry. It’s the move from pipes to platforms, writes Peter B. Nichol in his article Platform ecosystems: A new strategy for generating profit.
“Shifts in markets, shifts in competitive advantage and shifts in value creation have highlighted that value can no longer be created solely by company processes rearranging labor and resources, value creation stems from scale grown out of interactions,” he writes. “Today, success demands business leaders understand how platform-based ecosystems are reshaping traditional organization hierarchies and building new value.”
5. Customer experience is the new competitive differentiator
Customer experience (CX) is a high priority in the financial services industry. And for good reason.
It is the key competitive differentiator in the digital age, according to The Wall Street Journal, and “your only differentiator,” writes Inc.com.
In fact, 67 percent of general consumers are content to pay more for an exceptional customer experience, according to Salesforce. That makes every interaction with clients a chance to win or lose future business and share of wallet.
For financial organizations, this laser focus on CX is driven largely by the need to meet changing customer expectations and compete with innovative FinTech companies raising the CX bar. Part of the plan seems to be the creation of a seamless banking experience. One that spans both branches and digital channels and that provides a quick response to customer queries along every touchpoint.
To arm your employees with the ability to communicate consistently with customers across multiple channels in real-time, they must be able to access all the information necessary – including information on those past conversations and the channels in which they were conducted – instantaneously. They need a complete view of the customer.
So how do you do that?
By tying together key systems and allowing them to share information and work together. Many core systems aren’t built to effectively manage critical related content – from documents and forms to notes and emails. And it’s really not their job to do so. A robust content services platform complements those systems, providing employees with a complete view of the information they need, when and where they need it.
Tying it all together
When systems share information and work together, your ability to predict future needs and understand what that customer really wants grows exponentially. You gain insight about the customer, beyond how they shop, when they purchase and what they buy. You see patterns and predict choices they may make in the near future.
In short, you build a true relationship with the customer and give them an experience they didn’t expect.
What other technology trends are shaping financial services? Download Master the Top 8 Trends in Financial Services to find out.
- Time to weed the garden: How to keep the tech that works - 10/13/2020
- Innovation and evolution: The power of the Guidewire and Hyland team-up - 09/22/2020
- How data-nerdy are you? - 08/26/2020
