The arrival of 2020 has not only brought about the beginning of another year but is also revealing a new decade in today’s tech-drenched 21st century. This has many in the financial industry looking towards more ways that technology will greatly influence the banking industry along with its current consumers. This is why it’s vital for those in the financial sector to watch these four top digital banking trends in 2020 to stay relevant in this rapidly changing industry.
The Growing Presence of Digital Banking
The number of digital banks has shown consistent and steady growth given the fact their use by consumers in the UK has reached 73% of customers using these online venues. This reflects a rise from 53% just five years ago and this figure continues to rise exponentially.
Many major tech companies like Apple and Google have made significant strides in the financial services landscape with these newer neo banking methods. Meanwhile, FinTechs like Chime are targeting millennials while Kabbage is focusing on business acquisitions with more banks and credit unions expected to follow suit by deploying their own digital brands.
Digital solutions are becoming the preferred touchpoint for a growing number of consumers and businesses as these methods are both faster and more economical than traditional banking methods. They also expand an institution’s abilities to reach a global marketplace without opening brick-and-mortar branches. In order to be successful today, digital banks need to ensure the online experience is convenient, user-friendly, is safe from internet threats and provides value for its customers.
Making the Digital Transformation
The rapidly growing trend towards digital-first banking represents a major shift in thinking inside the financial industry. In the past, many institutions were operating in a silo-type environment where complexities and inconsistencies often lead to frustrating customer experiences. As the race for more deposits through digital means continues to intensify, touchscreen technologies will have the power to offer users more similar and fluid methods in banking.
Software solutions allowing customers to quickly and easily connect with all the services available to them will not only reduce banking costs, but these automated tools will also enable institutions to seamlessly integrate the customer experience. Entire processes will be simplified and banking as we knew it in the past will become more streamlined while still providing a personalised and intuitive journey in customer service.
Winning the Customer Service War
Digital devices like the Apple Card have shown how critical the customer experience is in the battle to attract, retain and expand on customer service relationships. In the case of Apple’s tool, future customers are able to apply in minutes and require minimal data entry from consumers. This type of online experience will be considered a standard against which all banks and credit unions will be judged in 2020 and beyond.
On the bright side, big banks and huge providers like Apple often lack trust equity which is something smaller institutions have built up in the financial sector. This level of trust represents a tremendous opportunity for smaller, more traditional banks to compete with bigger competitors. However, they won’t win the customer service war with poor digital experiences.
Small Businesses Embracing The Gig Economy
For those unaware, the “gig economy” concept refers to a general workforce where short-term engagements, temporary contracts, and independent contractors are becoming more commonplace. A growing number of startups are supporting the gig economy and the number of workers leveraging the freelance workforce is a sure indication that the nature of employment as we know it is changing.
It’s estimated that up to 30% of European workers consist of independent contractors. Unfortunately, many banks and credit unions aren’t able to offer a solution geared towards this rising workforce. Instead, many of them are relying on more costly commercial or retail solutions. For those small-to-medium-sized financial institutions that embrace the gig economy, they’ll likely see increased revenue opportunities in the future as their business continues to grow.
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