The Four Biggest Future Financial Sector Trends — 3 Current Growth in the Services Industry in 2015

Mobile financial services will become more prevalent in the coming years. Banking services will be available to users immediately, wherever they are, as the 5G network infrastructure matures. Furthermore, users will be able to conduct transactions using a wide range of mobile devices.

A number of new challenges are confronting the financial sector. Banks will have to change their business practices as customer expectations rise and competition heats up. They will have to demonstrate that they are acting in the best interests of their customers. While larger banks will be more resistant to these changes, smaller players will need to rethink their business models in order to meet customer expectations.

Regulators are increasingly putting pressure on banks to make their reporting processes data-driven. This means that banks will need to decarbonize their loan portfolios and become more efficient internally. The financial sector is also under societal and ethical scrutiny.

Despite this growing complexity, the financial industry has historically struggled to keep pace with technological advancements. Customer growth and retention strategies will undergo a significant shift in 2015. Personalized customer experiences will assist businesses in increasing their market share and attracting loyal customers. Financial institutions will eventually become more customer-centric, which will result in higher profits. It will also result in more innovation.

Fintechs bring digital-native startups and tech behemoths into the financial sector. These fintechs are powered by data and artificial intelligence. They are challenging the monopolies of traditional banks. Venmo, which is owned by PayPal, is one example of this. In 2020, the company will process $159 billion in payments, a 59 percent increase over the previous year. If traditional banks were to participate in this market, they would have to accept this increase.

Customers are becoming more tech-savvy and have different expectations of financial services. They expect a unified experience across devices and platforms, as well as real-time digital payments. The younger generation expects convenience and empathy as well. As a result, in order to remain competitive, banking must evolve.

Embedded Finance: One of the most important trends in the financial sector is companies’ ability to integrate new technologies into existing business models. These technologies are reshaping how consumers access their finances, while also disrupting existing ecosystems and creating opportunities for companies that can provide a personalized, integrated experience for customers.

Blockchain: Blockchain is one of the most promising emerging financial technologies. Bitcoin technology is already being used by major banks such as JP Morgan Chase and other institutions. Because of its rapid adoption, this technology will become a standard solution for financial institutions. It is important to note, however, that it is not yet available to all financial institutions.

Automation: Banks will need to implement cutting-edge technologies to improve agility, efficiency, and security. In 2022, embedded solutions, open banking APIs, and cloud computing will all play critical roles in financial services. Furthermore, banks will be required to improve digital customer experiences at an unprecedented rate. They must also rely on data and analytics to identify opportunities.

Banks are required to comply with an increasing number of regulations. These regulations are frequently complex and time-consuming. Many of these regulations rely on the ability to combine data from disparate sources. As a result, financial institutions may face significant compliance challenges.

As more customers migrate to digital financial services, financial institutions will need to redesign their operations and business models. This shift will have an impact on infrastructure investments, data modernization strategies, fintech collaborations, and reskilling programs. These modifications will have a substantial impact on the global economy. They will almost certainly result in a 6% drop in global GDP in a single year.