Numerous trends in banking have emerged in recent years, according to research by GBO

 

Digital transformation, the rise of fintech, a greater emphasis on the customer experience, more regulation, and social and environmental responsibility are a few of these themes. As a result of these changes, there has been an improvement in operational effectiveness and customer experience as well as a move towards inclusive and sustainable financial practices.

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    There have been several trends in banking in recent years.

    Some of these new banking trends include:

    1. Digital transformation: Many banks have been investing in digital technologies to improve customer experience and operational efficiency. This has included the development of mobile banking apps, the use of artificial intelligence and machine learning, and the implementation of digital payment solutions.
    2. The rise of fintech: Financial technology (fintech) companies have emerged as a major disruptor in the banking industry. These companies often offer financial services that are faster, more convenient, and more affordable than those offered by traditional banks.
    3. Increased focus on customer experience: Banks are placing a greater emphasis on customer experience, as consumers have come to expect personalized, seamless, and convenient banking services. This has led to the development of new services such as chatbots and personalized financial advice.
    4. Greater regulation: In response to the financial crisis of 2008, there has been an increase in regulation in the banking industry. This has included stricter capital requirements, enhanced risk management practices, and increased transparency.
    5. Social and environmental responsibility: There has been a growing trend among banks to prioritize social and environmental responsibility, including through the use of sustainable finance and the promotion of financial inclusion.

     

    Latest Banking Trends Updates to 2.10.2023:

    Third-party developers are now able to build applications and services revolving around financial institutions thanks to open banking efforts. This encourages more openness in the financial system and gives customers more options to interact with their banking information.

    1. Cryptocurrencies and blockchain: More banks are looking at using blockchain for fast, safe transactions. Some companies are even thinking about including bitcoins in their services.
    2. Biometric Verification: Banks are utilizing biometric verification techniques like voice authentication, facial recognition, and fingerprint scanning for increased security.
    3. Decentralized Finance (DeFi): As demand for DeFi platforms, which provide financial services without the need of conventional middlemen, increases, banks are being forced to reconsider their business strategies.
    4. Banking-as-a-Service (BaaS): Traditional banks and fintechs are working together to deliver Banking-as-a-Service, which enables third parties to directly incorporate financial services into their apps and platforms.
    5. Hybrid Banking Models: A number of banks are utilizing a hybrid strategy that combines digital services with tangible touchpoints like temporary branches or modified, tech-focused branch experiences.
    6. Cybersecurity is receiving more attention as the amount of digital banking transactions rises. Banks are making significant investments in cutting-edge security measures to shield client information and financial assets from online threats.
    7. Data analytics and personalization: To better understand client behavior and create more tailored services and product offerings, banks are utilizing big data and analytics.
    8. Collaborative Ecosystems: There is a movement to establish collaborative ecosystems in which banks collaborate with tech companies, other banks, or various service providers to give customers with all-encompassing solutions.
    9. Financial Wellness Tools: Institutions are providing tools and resources to assist consumers manage their finances, make plans for the future, and generally enhance their financial health, in addition to the typical banking services.

     

    These patterns show how the banking industry is always changing in reaction to new technical developments, shifting consumer tastes, and a more generalized economic environment.

     

    AI in Banking

    AI is being used in banking technology. This integration has transformed the banking industry, allowing financial institutions to provide faster, more efficient, and more personalized services to customers.  Chatbots, computer programs that mimic human conversations, are a major trend in AI banking. Chatbots improve customer service, reduce call center costs, and allow banks to provide 24/7 service. Chatbots use natural language processing to answer customer questions about account balances, transaction history, and credit card payments. Predictive analytics, which analyzes customer data to predict behavior, is another AI banking trend. Banks can predict customer needs and risks using algorithms to analyze historical customer data. Banks can offer personalized loan offers, investment advice, and financial planning tools to customers.

     

    Banks can also automate fraud detection and prevention with AI. Banks can reduce financial losses by identifying fraudulent activity in real-time using machine learning algorithms. Traditional fraud detection methods generate false positives, but AI can reduce them, improving customer experience. Robo-advisors, computer programs that give customers investment advice, was made possible by AI in banking. Robo-advisors can provide personalized investment advice based on a customer’s risk tolerance, investment goals, and financial situation by using algorithms to analyze customer data.

     

    The latest banking technology trends allow banks to provide faster, more efficient, and more personalized services to customers. Banks can offer 24/7 customer service, personalized investment advice, and customized products and services while minimizing financial losses with AI. As the banking industry evolves, AI will shape its future.

     

    There have been a number of trends in banking in recent years that have been driven by technological advances and changes in consumer behavior. Some of the most significant trends include:

    1. Digital banking: Many banks are now offering a range of digital banking services, including mobile banking apps, online banking portals, and virtual assistants, which allow customers to access their accounts and conduct transactions remotely.
    2. Mobile payments: The widespread adoption of smartphones has made it easier for consumers to make payments using their mobile devices. This has led to the growth of mobile payment systems such as Apple Pay, Google Pay, and Samsung Pay.
    3. Open banking: The concept of open banking definition involves the sharing of financial data between banks and third-party fintech companies, with the aim of providing customers with more choice and control over their financial lives .
    4. Blockchain technology: Many banks are exploring the use of blockchain technology to streamline processes and increase efficiency. For example, some banks are using blockchain to facilitate cross-border payments and reduce the risk of fraud.
    5. Artificial intelligence and machine learning: These technologies are being used by banks to improve customer service, identify fraudulent activity, and analyze financial data.
    6. Sustainable finance: There is growing demand for banks to support sustainable development and transition to a low-carbon economy. As a result, many banks are now offering products and services that promote environmental, social, and governance (ESG) principles.

     

    Bank Technology Trends

    There are a number of technology trends that are currently shaping the banking industry:

    1. Cloud computing: Many banks are moving away from traditional on-premise IT infrastructure and adopting cloud-based solutions, which offer greater flexibility, scalability, and cost-efficiency.
    2. Big data and analytics: Banks are collecting and analyzing vast amounts of data from a variety of sources, including customer transactions and interactions, to gain insights and make more informed business decisions.
    3. Cybersecurity: With the increasing prevalence of cyber threats, banks are investing in advanced cybersecurity measures to protect against attacks and data breaches. This includes the use of artificial intelligence (AI) and machine learning to detect and prevent threats.
    4. Digital transformation: Banks are using technology to transform their operations and customer experiences, by automating processes, enhancing the user experience, and enabling new ways of interacting with customers.
    5. Internet of Things (IoT): Banks are starting to use IoT technology to collect data from connected devices and use it to improve their services and operations. For example, banks are using IoT sensors to monitor and manage their branches, ATMs, and other assets.
    6. Robotics process automation (RPA): Many banks are using RPA to automate routine tasks and improve efficiency. RPA involves the use of software robots to perform tasks that were previously done by humans, such as data entry and document processing.

    Online banking has had the most profound effect on the banking sector over the last decade. The rate of change is accelerating, and is changing the whole customer experience.

     

    In 2023, automation of the customer interface and the application of advanced technologies like Artificial Intelligence and Machine Learning are going to be helping users to receive answers to their queries much faster and more efficiently without human intervention on the bank’s side. Clients will now expect to locate all of their relevant information much faster and be able to initiate the full range of transactions in real-time, 24/7, directly from their mobile banking application. Both financial service providers and customers must keep abreast of the impact that these changes are going to have over the coming year.

     

    At Money-Gate, we have worked with leading-edge financial institutions and customers in the digital banking, online gaming and cryptocurrency sectors for over 14 years. Whatever your needs or problems are when you are faced with this explosion in the depth and range of corporate banking and financial services, we have the expertise and knowledge to guide you through every step that you need to keep ahead of the changes.

     

    Expected trends for financial service providers in 2023

    We expect that the core banking trends in 2023 for participants in the banking industry will come from the profound impact of technological innovation. Until recently, much attention has been paid to overhauling the legacy processes in order to be able to meet changing customer requirements. Now, for most advanced banks, the focus will shift to maximising profitability in order to improve RoI as financial institutions are dealing with a difficult economic picture.

     

    General economic instability brought on by high inflation and the forecast of recession in major economies is pushing banks to put a new focus on innovation as a means of improving returns. The prospects for overall revenue growth are receding in the medium term, so financial institutions are looking for savings from efficiency initiatives derived from advanced digital technology.

    One way this will be achieved is by developing super-power applications offering full cross-platform features and functionality.

     

    Expected trends for customer demands from financial service providers in 2023

    The introduction of chatbots and humanoid robots is likely to revolutionise the financial services sector in 2023. Banks are deploying this technology as the first step to taking customer interactions into a wholly automated space. This will facilitate instant transactions, being able to offer individualised products and services full-time, and to shift away from the street-level banking scenario completely.

     

    Reforming the concept of money

    Blockchain has brought a quiet revolution for businesses, quite separate from the image bitcoin introduced of a highly speculative and unstable platform. Blockchain for business is changing some traditional business concepts, with processes like peer-to-peer transactions, digital transactions and settlement of trade and digital payments, eliminating intermediaries and accelerating the underlying processes. Blockchain technology will introduce substantial operating cost savings as more banks and financial institutions engage fully.

     

    Digital Transformation

    Digitization and the introduction of advanced technologies is both improving the banking sector’s operational efficiency, and delivering superior customer experiences through self-service digital channels on mobile and online banking channels.

    Digital banking trends in 2023 will allow banks to shift increasingly from face-to-face actions to fully digitised services. Banks will be offering advanced targeted service on a whole range of new devices that duplicate the functionality of smartphones but are more user-friendly and portable.

     

    Fintech companies will become increasingly associated with traditional banks.

    Many traditional banks will need to exploit the opportunities of the financial services trends in 2023 presented by digital evolution. Because they have already fallen behind the more advanced offerings of Fintech service providers, the movement will be either to spend considerable time and money to develop their own equivalents by expanding their systems in-house or by partnering with established Fintech companies that can slot into the gaps. Until now, Fintech companies were seen as competitors that only took advantage of the gaps that were due to the traditional banking industry’s failure to catch up with technological developments.

     

    In future, partnerships between banks and established Fintech institutions will become more common. These partnerships will fundamentally reshape the financial services sector. Fintechs can provide banks with established and proven tech-enabled banking services. At the same time, the association offers Fintechs access to much broader customer bases and improves their image of security and stability.

     

    In an opposite trend, Fintech service providers can also choose to become more directly competitive with standard banking operators. Neobanks, also known as digital-only banks, can offer some of the same services as traditional banks without any face-to-face interface. Customers use simple online interfaces to perform their transactions and rarely require communication with bank personnel. In this mode, Neobanks represent the leading edge of the mobile banking trends in 2023.

     

    Neobanks benefit from lower startup costs, improved reaction times in transactions for customers, and lower charges. These institutions can operate with considerably lower cost structures and pass these savings to customers, in the form of lower transaction fees or higher interest on their savings.

     

    Building up the customer’s banking experience in 2023

    In 2023 and beyond, one of the main driving forces for change impacting the banking and financial services industries will be the need to meet customer experience expectations. The main aspects of this open banking trend in 2023 and beyond are the need for financial institutions to provide an omnichannel banking experience, which means that customers can move seamlessly between their actions (mobile, online or face-to-face) without needing to initialize the action each time.

    For this to work, it is essential that the user experience can be personalized, with the interactions being based on knowledge of the customer’s needs and past experiences and requirements. Personalizing means that the customer will build a deeper relationship with their bank and be less inclined to shop around in the highly competitive market. To provide a fully personalized experience, the bank needs comprehensive and up-to-date data on which it can apply the powers of Artificial Intelligence and Machine Learning.

    This power will generate insights that help understand customer needs better and offer targeted marketing of products and services.

     

    Open banking trends in 2023

    In general, banks and financial institutions can select from an extensive range of technologies without having to invest considerable time and money. As part of the more significant trend towards Software as a Service (SaaS) replacing in-house application development, the movement inside the financial sector is towards open banking.

     

    Financial institutions can add new abilities to customers by opening up their own applications to third-party application programming interfaces (APIs) that provide new services. Expanding to these open banking trends in 2023 will allow banks to collaborate with Fintechs and not to compete with them. Open banking allows for cooperation with third-party payment and other service providers to share access to customers’ data between banks and financial institutions in a fully secure environment.

     

    FAQ

    What are the latest trends in banking for 2023?

    Focus in the banking and financial services industry is turning toward future innovation that will be increasingly driven by technology. Some key trends driving these innovations are a collaboration with FinTech, ongoing digital transformation, and the increasing role of AI and robotics. As customer demands and lifestyles change, institutions should redefine themselves in terms of becoming agile technology users.

     

    What is the future technology in banking?

    New technologies like artificial intelligence (AI), blockchain, and Internet of Things (IoT) will have a growing impact on banking through 2025.

    There are many potential future technologies that could be used in the banking industry. Some examples include:

    1. Artificial intelligence (AI) and machine learning: These technologies could be used to improve fraud detection, customer service, and financial analysis.
    2. Blockchain: This technology could be used to securely and transparently track financial transactions and reduce the need for intermediaries.
    3. Biometrics: Banking institutions may use biometric technology, such as fingerprint or facial recognition, to increase security and reduce the need for passwords.
    4. Mobile payments: The use of mobile phones to make financial transactions, such as payments or transfers, is expected to continue to grow in popularity.
    5. Virtual and augmented reality: These technologies could be used for training, customer service, and marketing in the banking industry.
    6. Internet of Things (IoT): The integration of sensors and other devices into the banking system could enable new ways of managing and tracking financial assets.

    Overall, the use of technology in the banking industry is expected to continue to evolve and expand, leading to increased efficiency and convenience for customers.

     

    What technology banking trends for 2023 are affecting banking?

    As banks consider to set their priorities for 2023, predictive AI, robotic services and consumer’s growing demand to pay for digital services and goods in the metaverse are among the top bank technology trends 2023 for financial institutions.

     

    What is a Valyuz account?

    A Valyuz (AKA internet-only bank, online bank, digital bank or virtual bank) is a financial institution provider that operates purely through online interfaces, without physical branches or face-to-face customer interactions.

     

     

    About the Author: Gilad Oren

    With over 25 years of experience, I have cultivated a career marked by entrepreneurial spirit and deep financial expertise, particularly in finance and online marketing. My professional journey began in the private banking and investment sectors, where I sharpened my skills for many years before making a significant pivot. I ventured into entrepreneurship by founding an Electronic Money Institution (EMI) and later incorporated GBO International Financial Services.   At GBO, we have established ourselves as a comprehensive provider of global corporate services, including company formation, banking assistance, and licensing for gaming and crypto sectors, alongside merchant account consultancy and digital public relations. My career is a testament to combining industry knowledge with entrepreneurial zeal to create impactful solutions in the financial and online marketing landscapes.   Let's connect in LinkedIn: https://www.linkedin.com/in/gilad-oren-326231220/

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