Given that our society is in a constant state of flux in terms of healthcare, corporate, and IT industries, the financial sector isn’t lagging. In the age of COVID-19, smart banking solutions have become more important than ever.
This has prompted startups, banks, and financial service providers to reinvent the wheel once more and apply new trends to existing business models. How exactly did the financial service industry grow and improve during 2021, and what does the future hold for services that we all rely on?
-
Robotic Process Automation (RPA) in Customer Servicing
Slowly but surely, more and more financial service providers rely on RPA technology to process data effectively. With their client bases increasing rapidly over the years, banks have started to use automation and AI as a solution for their generated data.
In turn, RPA allowed financial firms and banks to introduce better client onboarding, identity checks, data analysis, as well as compliance processes for repetitive tasks. This has manifested in the form of more free time being available for financial industry professionals, who can now turn their attention to clients themselves. Time will tell whether robotic process automation continues to be an integral part of banking in 2022 and beyond.
-
Continued Reliance on Blockchain Technologies
As people start to move abroad and create multiple bank accounts in different countries, the need for blockchain technology has become larger than ever. While blockchain started its life as a means to track crypto transactions, it has now become an important part of modern banking.
Financial institutions use blockchain technology to track their clients’ data, perform in-depth data analysis, and make their assets safer. While highly developed economies have adopted blockchain as a standard, it will take some time for the technology to plant its roots worldwide. This brings with it a myriad of other issues, such as government and tax regulation, which will need to be evaluated on a country-to-country basis.
-
Increased Application of Biometric Identification
Biometric identification has been in widespread use in smartphone devices for years. In 2021, we’ve experienced a much wider application of biometric identification in financial services and banking. Clients are now slowly able to use their fingerprints or retina scans instead of PIN codes and passwords.
While this might seem like a sci-fi concept to some parts of the world, the technology has been implemented by Google Pay, Apple, and Tencent. This will make everyone’s banking activities far safer than ever before. Even if someone steals a credit or debit card, they won’t be able to access the person’s funds without proper biometric authorization. We hope that this technology becomes widespread soon, although, given its need for special ID equipment, its implementation may yet be far off.
-
Further Development of Contactless and Cardless Transaction Models
While biometric ID technology continues its rapid development, further innovations are found in contactless and cardless transactions. Mainly, people are now able to fully pay for any services by using their smartphone banking apps. There is no longer any need for people to carry physical cards on them to purchase goods or services.
This makes fraudulent use of bank accounts null and void. However, it should be noted that people still need to have their smartphones and stable internet connections to make purchases. This is a small discrepancy in an otherwise net positive development. The end goal of this trend is to eliminate physical payment methods, but we’ll have to wait and see what the future holds.
-
Widespread Accessibility of Digital-First Insurance Programs
With the widespread use of smartphones and tablets, financial institutions have begun selling digital-only insurance programs to their clients. Whether you’re headed abroad or want to attain insurance for your car or house quickly, you are now able to do so via the internet.
This has expanded the level of personalization provided by insurance companies, which are now able to meet the demands of a much wider audience. Regardless of whether you need heath, car, or travel insurance, companies will be ready to provide you with them without having to visit local offices. This has further streamlined data processing and client onboarding for financial institutions across the globe.
Bold New Directions for the Financial Industry (Conclusion)
Innovations that the finance industry experienced in 2021 are only the tip of the iceberg when it comes to digitalization and total banking reinvention. Banks, clients, and governments alike will have to go through drastic changes to accommodate for new and disruptive technologies making their way into finance.
No one can say for certain what the future holds for the financial services industry. We can only hope that all the exciting innovations which are on the way make our lives easier, faster, and safer as a result.