When it comes to technology, one thing's for sure: it's constantly changing and evolving. Financial technology, or FinTech, is no exception. And while it can be tiring to keep up—let alone stay ahead—in the industry, financial institutions must do so, since falling behind quickly allows competitors to gain ground.
Currently, we're seeing four major trends in fintech that your financial institution, no doubt, will want to take advantage of. In this blog post, we’ll discuss:
RPA and AI technology
In the early 2000s, a “digital wave” of internet development, technology investments, and advances in data processing enabled financial institutions to achieve unprecedented levels of efficiency. According to PWC Global, “This wave extends from customer experience and operational efficiency to big data and analytics. In financial services, we have seen this approach applied to payments, retail banking, insurance, and wealth management, and migrating toward institutional areas such as capital markets and commercial banking.”
Having lived through this digital wave, the modern consumer expects to be able to interact with their financial institution digitally. According to Pew Research, “The share of Americans that own smartphones is now 81%. Along with mobile phones, nearly three-quarters of U.S. adults now own desktop or laptop computers, while roughly half now own tablet computers and roughly half own e-reader devices.”
The numbers tell a revealing story. It's evidently clear that in order to effectively reach your customers, your financial institution must create tools and services that are digitally accessible. Consider your app or online experience as an extension of your institution’s customer service. Your digital experience should have a similar “feel” to your overall customer service experience. If a mobile app is not in your institution's long-term plan, engage with your teams to make sure your current website is responsive, meaning that it automatically adjusts to whatever size screen your member decides to engage with (desktop, tablet, or smartphone).
Robotic Processing Automation (RPA) and AI
Robotic process automation, or RPA, is technology that utilizes computer software programs, or “bots” to perform actions that a human would traditionally do, then reproduces and integrates those actions within digital systems to execute a specific business task.
RPA bots are able to capture data and perform certain actions based on that data incredibly effectively and efficiently. They can interpret information, integrate with or “talk to” other systems, and respond to complex commands that allow them to perform essential duties that are often time consuming and monotonous for humans.
Artificial intelligence (AI), or machine learning, is increasingly playing an integral role as an innovative solution for financial institutions everywhere. Within the financial services sector, institutions are deploying AI technology in conjunction with data-driven decision models (DDDM) to drive empirical decision-making that was previously unavailable.
Financial institutions have tremendous access to more data than ever from their account holders. Many financial institutions sit on a mountain of data without the necessary data-mining capabilities to offer a greater personalized membership experience, accurate credit decisions, fraud detection, and enterprise risk management. Using AI technology with sophisticated data analytics, financial institutions can discover trends within their existing datasets that ultimately lead to better service options for their account holders.
Investing the time to learn more about your account holders through the use of data is a value-added exercise. Analyzing datasets allows your institution to develop deeper insights about their account holders’ financial activities. Digital usage gleaned through online activity, website, and mobile apps provides valuable insight on consumer behavior. Financial institutions that adopt data-driven decision making models can realize measurable improvement with their customer engagement while helping to drive more informed business decisions.
Omnichannel Payment Options
More and more, consumers are demanding a broader choice of payment options, expecting to be able to make payments anytime, anywhere, using any method. Consumers are becoming more fickle and less loyal in their choice of providers, and financial institutions must adapt or succumb to growing competition. Today, consumers make purchasing decisions using all available channels, and they're extending their omnichannel preferences to financial institutions as well. As a result of experiences in other industries, consumers expect simple transactions and “omni-commerce,” the integration and consistency of payments across channels and devices, to create a seamless, superior customer experience.
This demand for broader choice in payments by consumers in an integrated and consistent manner is in large part due to the very high growth in electronic payments of all types, across all markets. From the growth of payment cards for low-value, day-to-day use, the development of online and now mobile commerce channels, to the growing rates of financial inclusion in all markets, consumers now have more choice in their payment tools than ever before, and increasingly expect a variety of integrated options. As a result, financial institutions must adapt and offer a growing range of cost-efficient payment tools to their customers to further their growth.
In today’s world of advanced financial technology, failing to keep up means sacrificing customers. Capitalize on these trends now to grow your existing relationships and make sure your financial institution is top of mind for new prospective customers!