Financial institutions are forming adaptive banking software solutions to ensure an economy in the postal world. Experts identify several promising trends that will help many banks find new competitive advantages.
Perspectives of the banking market
The US financial market is a leader in terms of the variety of technological convenience for the customer. Specialists have achieved a high level of customer service. Therefore, the United States pays particular attention to infrastructure and systems issues. It is required to ensure operational cost efficiency of the financial services technological landscape.
The main areas of strengthening the financial position of American banking will be the use of cloud technologies. There is BaaS (banking as a service), NFT and biometrics.
Neobanks are building digital-first and mobile-first services. It focuses on a well-developed UX, new attraction and monetization models. Digital banking innovations are an indicator of global fintech trends. And a key source of new product ideas for global companies striving to deliver the best customer experience.
Neo-banks lower the entry threshold, positioning increases the customer’s average turnover.
Neobanks rely on a high-quality service that sells itself. So they try to give customers a chance to try the features first to understand their benefits. This enables onboarding into products and shows all the advantages of a digital service. It helps transfer the user to a paid tariff plan or make money through cross-sales.
For example, if there is a free base plan, the Bunq application offers new users 30 days to use the features of a paid plan. The service informs that this does not impose any obligations. And when the trial period is over, the application will offer to pay for a subscription or switch to a free plan.
Another distinctive feature of neobanks is the lack of full-fledged customer support. Most of the tasks are automated or solved by the users themselves. A big bet is being placed on support by a community of users answering customer questions on the forum, replacing the initial support hotline.
The development of the knowledge base also contributes to the independent solution of questions. It is combined with forums served in the format of cards or video guides.
In the USA, people are already talking about the second generation of mobile banking.
The increased popularity of mobile payment is impressively demonstrated by the statistics of the online shop eBay. It received $2 billion in payments over phones in 2010, three times more than a year earlier.
In the USA, experience with the use of mobile banking is more extensive – some banks offered it to their customers as early as 2007. Bank Systems & Technology published an article with prominent representatives of SunTrust. He highlights 10 keys to banking success.
While it concentrated most of the noise around smartphones and applications for them, not all bank customers use them. And analysts advise banks to use three types of mobile payment solutions. Downloadable applications, mobile browser applications and SMS payments. Now SunTrust has twice as many web clients as application users.
IBC Bank in Texas released its iPhone app back in 2008. Since then, customers’ use of mobile banking has increased, according to bank officials. But when the bank released an application for a browser, the number of transactions made using a phone increased sharply.
Statistics from the Cloud Payments service show that contactless payments are winning in business. The share of Apple Pay and Google Play in sales has reached 10%: Apple Pay accounts for 8% of this. The experience of a payment service has examples of indicators from an online flower market to a pizzeria.
Contactless payment is a payment method. Today, almost every consumer carries a smartphone, mobile platform or smartwatch in their pocket. These are Google Pay (formerly Android Pay), Apple Pay and Samsung Pay.
Originally, these payments were used in POS terminals. You lean your smartphone, tablet or smartwatch against the payment terminal – the payment has been made. Then the contactless payment method was used by online companies. In most cases, it is sufficient if the user affixes a fingerprint or scans a face using Face ID.
Online payment by bank card and payment via Apple Pay, for example, are not the same. Payment by bank card is not considered contactless, as it requires entering card details. Contactless payment is a one-click payment that does not require additional data entry. It’s convenient and practical.
According to analysts’ forecasts, in 2022 AI will be used in the work of almost all departments of the bank. The convergence of AI, the Internet of Things (IoT) and 5G networks will expand what a financial institution can do.
It not only takes into account the basic risk parameters, but also forms predictive models. For example, the use of AI in building customer experiences within ecosystems can make an impact by bundling credit products.
According to Business Insider, 71% of customers will switch to mobile banking by 2024. And in 2021, fintech applications will become more popular than real banks. However, entering a promising market does not guarantee profit.