By David Mitchell, President at NYMBUS
With the first month of 2017 already behind us, many organizations will have a plan of action for the year that lies ahead. This is especially true for entities in the banking and fintech industry. With technology evolving at a formidable pace, they will look to the coming months to exploit opportunities arising as a result of these fast-paced developments. So what are some of the trends can we expect in 2017?
AI (Artificial Intelligence) technologies will continue to improve
Advanced analytics and improved machine learning technology will give business users valuable insights into what services are available to them. Major financial institutions and fintech giants have started to embed advanced computing components into their core systems. Many organizations within the industry are expected to follow suit throughout 2017.
Growth in the technology means that “AI” is getting smarter and more efficient, meeting customer needs and fueling innovation in the process. Organizations can explore new ways to use the technology, especially through the integration with mobile phone apps.
By creating smarter, personalized apps, financial institutions will be able to offer better services and boost the overall customer service experience. This will give them the grace to test new products and services, which is essential for growth. Additionally, customer accessibility will be greatly enhanced through the use of clever apps.
“AI” technology and startups are expected to attract billions of dollars in investment this year. Banks and financial institutions will look at updating their core systems to accommodate the technology. “AI” has the power to transform business models and create new revenue streams. The majority of organizations will therefore look to benefit from the technology through budgetary provisions and executive responsibility assignments.
Mobile payment security
The popularity of mobile payments and wallets will continue to rise. For many people this is still a foreign concept but the growing percentage of customers transacting through a mobile device is staggering. It is expected that by 2020 almost half of all digital commerce will be conducted through a mobile device.
There’s a rising demand for quick and easy payment methods. Banks and credit unions are responding by making radical changes to the way clients transact and placing greater emphasis on payments through mobile devices. Fintech companies are also aiming to make transactions more secure and as convenient as possible.
Consumers are becoming more dependent on mobile transactions to purchase products as well as services. Mobile money is set to dominate in the not too distant future and apart from the cost benefits attached to it, business executives are also seeing the improved customer experience that it brings.
Companies are therefore thinking about mobile-first for 2017. Ease of payment and continual developments in online security has made customers more open to the idea of mobile transacting. Even the most resilient technophobes are slowly coming around to the idea. Mobiles have become much more than just our phone as we become ever more dependent on them. It should be no surprise then to see mobile payments increase in the coming year.
The rise of chatbots
First off, what is a chatbot? A chatbot is a service, mostly powered by rules, which you interact with via a chat interface. So for example, instead of browsing online for a product or service, you can inquire about it through the chat interface and it will respond, simulating the experience you will get from going into a branch or office.
People increasingly use messenger apps as a form of communication. Developments in this technology therefore present great opportunities for banks and financial institutions. Organizations willing to invest and create a chat interface as part of their service will be able to provide an additional avenue for their clients to interact with them. The easier they make it for their clients to communicate with them, the more likely they are to stay loyal.
Banking and financial institutions are increasingly using chatbots to respond to queries and help customers make decisions. Some of the benefits are that it’s not so expensive or resource intensive to develop and maintain, it can save on staffing costs and it has the potential to increase brand recognition. Rather than think about these bots replacing customer service representatives, payment providers and financial institutions should see it as an opportunity to help existing employees make services more efficient. It can take on some of the workload but when more intricate inquiries arise, the option of speaking to a human being is still available.
Customer experiences will become smoother
As technology improves, clients are expecting flawless and simple digital services. Banks need to redesign and enhance their core processing services to accommodate this. 2017 will see increased focus on the customer service experience by providing more personalized financial services, especially in the areas of checking and deposit accounts, mortgages and loan approvals.
Many financial institutions still struggle when it comes to providing personalized digital services. There are therefore considerable opportunities to take advantage of for organizations looking to become digital financial service providers.
In order to do this though, they need to move away from legacy core systems and invest in up to date technologies. 2017 will see more and more financial institutions going this route.
Financial institutions will become more intuitive as they realize what worked in the past doesn’t necessarily work anymore. They can’t just look at buying behaviors anymore and wait for the customer to take action. They need to become more pro-active and anticipate their client’s needs. If they want to build and maintain new customer relationships they must also make it as simple as possible for potential clients to find, learn and purchase their products.
The year ahead will see the emergence of new operational structures and organizational agility. Cultures within banks and financial institutions especially, are likely to be reshaped in order for them to become more customer-centric and digitally competent. We will certainly see more fintech and financial institution partnerships which will bring forth some exciting innovation to look forward to in 2017.