Rapid technological change and the growth of Oracle Flexcube universal banking have caused a shift in consumer expectations that is reflected in the rising number of people who want immediate access to products and services via the use of mobile devices everywhere. In 2022, there are a number of developments that are expected to have a significant influence on every institution, large or small. Digital banking’s expansion has been closely monitored by financial institutions and banks alike for some time now.
The COVID-19 epidemic increased the significance of digital transformation, and financial services businesses had to adapt their processes to meet the changing needs and expectations of consumers and workers as a result. Financial service providers are reinventing their technology platforms in order to assist consumers in achieving their financial objectives, making it simpler for them to manage their money when and how they want.
A digital-first experience is becoming more and more expected by customers, and financial service providers are adapting to meet these demands. Looking forward to the year 2022, here are five key financial technology developments to watch.
1. Mobile-first experience
There are more than six billion mobile phones in use throughout the globe today, making them a significant tool for financial service providers that want to physically put their goods and services into the hands of their customers. Customers have come to expect instantaneous access to services through their smartphones, from any location, at any time. The younger generation, in particular, prefers to utilize their mobile devices for all of their everyday transactions and activities, including shopping.
The use of mobile payment services rather than cash or credit cards is becoming more popular among consumers who make purchases online or in person. Banking and insurance businesses are continually encouraging customers to download and install their mobile applications as smartphones become the major interface between digital and real-world transactions. Providing digital services to consumers not only saves banks money but also improves the customer experience since customers have continual access to their financial institutions.
Also gained access to are large amounts of information on customers’ lives and behavior, which enables service providers to provide more tailored goods and services, such as biometric security, to their clients. Mobile phones will be used by banks and financial service providers to implement chatbots, cardless banking, and tailored messaging by the year 2022. The majority of customers expect that by 2024, 61 percent of their banking transactions will be digital.
2. Cloud Banking
The COVID-19 epidemic expedited the transition of banks and financial services companies to the cloud since digital services, security, and resilience were becoming more important. Other breakthrough technologies like mobile, blockchain, Flexcube, and artificial intelligence may be more easily and cost-effectively implemented using cloud technology.
This industry makes use of a hybrid cloud, which combines public and private cloud services from many providers, as well as a multi-cloud architecture. To satisfy their environmental, social, and governance (ESG) objectives, financial institutions have implemented rigorous policies on sustainability and decarbonization, which cloud services may help them achieve.
3. Artificial Intelligence and Machine Learning
The financial services industry was among the first to employ artificial intelligence for the automation of repetitive procedures, risk assessment, and fraud prevention. Of all the emerging technologies, artificial intelligence and machine learning have the greatest potential to assist financial services in moving into the future by better mitigating risk, optimizing portfolios, combating financial crime, delivering personalized customer experiences, and other applications. Artificial intelligence enables the analysis of massive volumes of data and the production of really informed judgments.
Customers were compelled to make major modifications to their banking habits as a result of the epidemic. In the next year, there will be an increase in the number of use cases involving recognizing and reacting to changes in client behavior. Fintech startups, mega-retailers, and digital giants such as Google, Amazon, and Apple are now competing with well-established institutions by offering services that were previously only available via financial institutions.
Artificial intelligence and data-driven platforms can give customers access to financial tools, advice, and integrated solutions, while simultaneously protecting their privacy and ensuring their security. Between 2021 and 2025, it is estimated that the financial services sector will spend roughly 14 percent of a total of $204 billion on artificial intelligence. Credit applications will also be extensively utilized by AI to guarantee that credit applicants get fair and impartial treatment, with algorithms growing more efficient as time goes on.
With their unique properties, blockchains are posing a significant threat to the financial services sector. Because they are scattered among several computers, there is no single person in command of the whole system. Second, they are encrypted and can only be changed by those who have access to cryptographic key pairs. In the third place, they are guided by a general agreement.
They have enormous potential advantages because they can simplify infrastructure by limiting fraud, boosting transparency, speeding up essential operations, and enhancing security. They have a lot to offer. Banks and other financial institutions have been experimenting with blockchain projects for some time, and several have deployed pilots or particular use cases as a result of their research. Beyond cryptocurrencies and digital money, additional creative blockchain applications in financial services will emerge in 2022.
5. Better customer experience with technology
When mobile, cloud services, artificial intelligence, and blockchain are used to build solutions for clients, they have the potential to alter the industry. Apps for banking services are ubiquitous, and their objective is to provide a positive customer experience by allowing clients to access banking services from any location. With the advent of new technological developments, service providers are increasingly fighting to distinguish themselves and further enhance the client experience by properly using them.
Several applications now include built-in artificial intelligence assistants for duties such as helping clients manage their money more efficiently by analyzing spending trends and automatically proposing the next steps. Personalization is made possible by artificial intelligence, which uses data to connect consumers with goods and services that are specifically tailored to their needs. A sophisticated voice interface and chatbots will be another must-have feature that will be introduced throughout the course of the year.
As a result, banks rate improving the digital experience of their customers as their most critical business problem and top goal for the next year. For financial services companies to enhance their client experience, they must satisfy not only current customer expectations but also predict future consumer demands and be prepared to fulfill those expectations.
Financial services are being transformed by new technological innovations, like Oracle Flexcube 14.x. New and creative solutions are being brought to customers while banks and the financial industry gain new possibilities. Future-proofing your institution and appealing to a new generation of clients will depend on how quickly you embrace these trends.