Be it retail or corporate banking, the financial services industry is growing rapidly in 2018. As the dynamics of the industry are changing quickly, banking entities are consistently under pressure to perform well and keep a tab on all their developments. The good news is that the banks are changing for the better and the real winners in changing times are customers.
Let’s take a look at some of the most prominent trends in the banking sector in 2018.
This is by far the biggest trend in the banking sector. As technology has crept into every aspect of baking services- from managing retail accounts to providing capital market access, it is important to ensure that banks stay on top of the line and innovate consistently. The banking industry has changed more in the past ten years than it has changed in the entire century.
Banks are hiring more techies than ever, even in emerging segments like blockchain and artificial intelligence. They are also experimenting with big data for both retail and corporate finance.
Instead of simply creating banking products, banks are now listening to their customers and providing them exactly what they need. This includes reaching customers where they are, i.e. on social media channels. Several banks are now opening social media conversations and handling customer complaints and feedback directly from there. Products are also simpler to obtain and easier to process. This is helping banks in developing as brands and maintain customer loyalty as well.
Cyber risk mitigation
As technological aspects of banking are influencing the industry heavily, it has become important to work extensively in the cybersecurity area and ensure that banks remain away from hacks and data leaks. This includes the creation of legacy cyber security products and working with strategic partners for the research and development of advanced measures to protect customer data and money.
Prevention of frauds and NPAs
Legacy systems played an instrumental role in keeping frauds away. However, with changing times, it is becoming essential for banks to detect frauds and NPAs as soon as possible and redress the problems as they can. Blockchain technology shows promise in the industry as it works with immutable distributed ledgers that can be used to track banking relationships with an entity from start to finish. It could also be used to identify problems, managing payments better and handling international exchanges more efficiently.
Another important trend in the industry is the push towards automation. Banks are reimagining their workforce, which could include robots and AI chatbots or full-service virtual assistants in the near future. This workforce recalibration could be helpful in reducing risks of frauds, handling customer problems more easily and providing a more prolific banking experience to all customers.
The sector is also watching developments in the fintech industry closely, which has the potential to slowly eat away at banks’ profits, especially in regard to the payments segment. The entry of big tech in the banking and payments sector is another threat that is being watched closely.