The financial services industry continues to gain ground in today’s digital world. It’s estimated that 69 million Americans utilize mobile or online banking to one degree or another. That means financial services providers who lag behind in current digital technologies are rushing to catch up with their consumers.
The problem is that technologies are always changing and keeping up with the latest digital trends are a challenge. Is it worth it in the long run? The answer is a resounding ‘yes.’ Statista, reports that the number of Americans living in households where someone uses online banking has nearly doubled between 2008 and 2017. With that said, not all digital technologies are created equally. Here are five digital trends and technologies that financial services companies need to stay at the top of their game.
API: Of the Third Kind
While it sounds like something out of a sci-fi movie, open API’s, or connecting with third-party providers, are making waves and everyone is taking notice. With more consumers using online banking, open APIs make sense. As an added bonus, many financial institutions are monetizing their open APIs to create new products for their consumers. Monetizing your open API allows you to explore new revenue streams, according to the 2017 World Retail Banking Report.
Despite the push to go open, don’t take this to mean an end to traditional CX-based processes. Instead, forward-thinking financial institutions are making adjustments and thrusting their digital boundaries skyward.
Cloud Technology: Skyward Bound
Speaking of the skies, Cloud technology is here to stay and benefiting financial services institutions in many ways. Cloud technology gives users the ability to scale up or down based on website needs and consumer demands. For financial services institutions seeking to beef up their digital toolbox, Cloud is the way to go.
While there are some concerns over security, Bulletproof, a managed Cloud service, assures you that micro-segmentation can help alleviate these concerns. The tools that allow for continuous code deployment can also be used to provide continuous security verification as well. So, too, are additional IT training and compliance measures. In 2016, Business Wire reported that 61% of organizations were planning on doing just that while others intended to pursue other options.
Digital Banks: A Threat or Full Throttle
Open API technology has arrived, but not everyone is welcoming it. With open API, banks can digitalize the way they do business. The concept of open banking, though daunting to some, is gaining speed and will continue to do so. In fact, digital banking among consumers has been steadily rising. It is expected to encompass 70.4% of adult internet users this year, up nearly an additional 10% since 2013.
Many in the financial services industry have concerns that open API’s pose security risks. Yet, others, including World Bank institution, CGAP, see this as another improvement in the overall customer experience and are going full throttle to test the waters.
Blockchain Technology: To ‘B’ or not to ‘B’
The financial services industry continues to heat up to Blockchain. While blockchain ledgers were initially created for tracking cryptocurrency transactions, far more potential is being realized and explored through them. Banks and financial institutions are seeing big cost savings and simpler accounting transaction management. Even stock exchanges aim to benefit through this digital techno geniusness according to Pete Rizzo of Coindesk.
Cryptocurrency security concerns still loom overhead, but only because Bitcoin uses a public blockchain which is like having many hands stirring the pot, so to speak. Yet, not all blockchains are created equal according to Allison Berke of the Harvard Business Review. Private blockchains allow more control thus, decreasing the risk of safety concerns while still providing you with added benefits.
Virtual Private Assistants: Move Over Siri
Virtual private assistants, or VPAs, are fanning the flames for discussions as well. Everyone has one, wants one, or is planning on getting one. According to Statista, the predicted number of VPA users is expected to nearly double by 2019 compared to 2017. With growth like that, companies are looking into how they can implement this technology into their own businesses.
Contributed by Beth Casey of Trustradius