2021 trends to differentiate your banking solutions

Personalisation

While it is no secret that for many years personalisation has been earmarked as a growing trend for organisations to attract customers and maintain loyalty, as we enter into 2021 such a trend only stands to gain traction as more and more consumers enter the virtual financial world.

In a recent Forbes article by Personetics, the company reflects on being better prepared for the future, stating that forward-thinking organisations are looking to capitalise on customer data, in order to better understand their clients and improve their personalised experiences. With data-driven personalisation rapidly increasing in its adoption among customers to view finances, spending habits and saving opportunities in real-time, banks that fail to adopt these trends could face limiting their customer base and stunting their growth.

Other personalisation trends emerging in the industry include smart contracts that eliminate many of the inconveniences associated with traditional contracts. By harnessing computer coding and cryptographic keys as digital signatures, smart contracts increase the speed of fintech transactions, and provide alternative onboarding methods. In addition to alternative onboarding methods, there has also been a rise in customer demand for alternative financing and installment methods. With many around the world facing financial challenges due to the impact of COVID-19, organisations such as Klarna, who provide flexible ‘buy now, pay later’ models, stand to thrive in the current climate alongside those also offering mortgage, investment and credit advice online. 

Digitalisation

2020 - the year that ‘digital transformation’ took industries by storm. With millions of organisations transitioning their operations to 100% remote working overnight, COVID-19 has forced many to increase their digitalisation speed. However, with 74% of organisations seeking to maintain the increased levels of home working post-COVID-19, organisations must ensure they are being smart and efficient. 

Ways in which the fintech industry is driving digitalisation include the use of blockchain and artificial intelligence (AI). Such technologies are expected to innovate the entire global finance ecosystem, eliminate centralised processes, enhance cryptocurrency, and allow for faster and move convenient transactions for customers.

With increasing reluctance to touch cash as a result of the pandemic, contactless payments is another area which has seen significant growth since the outbreak - it is predicted to have a value of over US$100bn by 2026. As the amount of customers realising that contactless payments are safe, easy and efficient continues to increase, it is unlikely that this trend will reverse in the future. As a result, traditional and new entrant organisations should look to provide these kinds of services in order to maintain a competitive edge going forward. 

Mitigating threats

While trends such as digitalisation and personalisation are certainly positive evolutions for the industry, with all innovation comes challenges and potential threats to mitigate. With this in mind, two considerations that those looking to accelerate their digitalisation strategy should also bear in mind include cybersecurity and fraud protection.

With Google reporting that, in one week, it saw 18 million daily malware and phishing emails related to COVID-19, now more than ever - as organisations increase their digitalisation - it is important to ensure that there is a high level focus on cybersecurity and the protection of customer data. Being able to demonstrate this to customers, ensuring that they feel safe and that their finance is secure, will be vital for retaining customers. Fraud prediction, similar to cybersecurity, as more and more financial processes are conducted online, those that try to commit fraud will also look to evolve, increasing digital fraud challenges. New technology such as Visa’s latest AI credit application fraud prevention tool, will be vital to mitigating those potential threats and providing security for customers.