Retail banking trends to watch out for in 2021

Retail banking trends to watch out for in 2021:

After Covid 19, the financial sector, including the banking sector, collapsed due to an unprecedented global recession. The combined response from the banking industry was one of resilience and mobility as the technology was used efficiently and a smooth transition to virtual operations was made, which laid the groundwork for several new retail banking trends to be considered in 2021.

 The World Bank database shows that of the more than 3,000 policies signed in October 2020, 54% were from the banking sector alone. COVID-19 has begun to implement future business models as retail banks shift their focus to integrated risk management, with a priority on cost transformation and virtual customer engagement.

 Banks offer a better service experience with personalized offers, aiming to humanize digital channels for greater engagement. It will also become an advanced one-stop-shop offering customers value-added financial services and lack of financial experience. Banks use the cloud. According to Fitch Ratings, returns dropped to 1%, but private banks strengthened their capital position with digital assumptions.

 By 2021, there will be enough room for growth and innovation in the sector and its policies, as banks will benefit from the efficiency, flexibility, and affordability of digital banking services. Let’s take a look at the key trends for retail banking that are expected to transform the industry in 2021.

1. The rise of the neo-normal

Non-digital banks or new banks operate through a digital interface and will rewrite the banking system by 2021. The banking industry is shifting from product-oriented institutions and agency interactions to seamless, personal digital experiences for customers. Traditional banks have also explored their own technological solutions to complement their digital offering.

 With a projected CAGR of 45.23% between 2020 and 2027, the future of new banking services looks promising.

Modern banking automation

In the coming year, automation will become an important tool for retail banking, enabling banks and credit unions to use sophisticated workflows to run complex processes. Artificial intelligence and other technological advances will help manage banking services with lower operating costs and improve the customer experience. With RobPA Process Automation (RPA), collisions are smart enough to offer KYC / AML processes significant benefits and help customers with banking services without human intervention. Artificial intelligence will help banks leverage big data and provide personalized services to customers.

 Autonomous research forecasts predict that artificial intelligence technologies will help reduce operating costs by 22% by 2030.

3. Advanced Cloud Computing Technologies

By the end of 2021, there will be many partnerships between financial institutions and cloud service providers such as Standard Chartered and Microsoft, who have recently joined forces to become the first cloud-based bank, with all major banking systems at 100%. end of 2025.

 As large volumes of data are processed by banking institutions, advanced cloud technologies have become a strategic priority and banks are investing in cloud environments to make banking processes safer, easier, and more convenient. Over the next few years, the cloud will help reduce risk and increase the stability and control of enterprise platforms.

4. Information security with blockchain for information security

Telework is becoming increasingly popular and should become commonplace as businesses find ways to save costs. It has also led to an increase in the exchange of critical and confidential information, especially financial data, between banks and customers in the cloud.

 Cybersecurity and access control will play an important role in sharing secure and verified data. Blockchain technology will play a role in transforming the banking sector and ensuring secure transactions. Blockchain has earned the trust of customers in fintech enterprises. As services go online, the threat of attacks is greater and financial institutions are investing heavily in cybersecurity over the next four years.

5. Open Banking, Open Finance, and more

As Open Banking grows, the path to Open Finance and Open Data leads to the delivery of linked, data-driven consumer experiences. Open Finance is an extension of Open Banking’s data-sharing principles, which allow third-party providers to access customer data in a variety of financial industries and products, including savings and investments.

By 2021, Open Banking will be more accepted and global regulators want to open their own versions of Open Finance. The OBIE (Public Banking Implementing Authority) has announced that the number of users of Open Banking products has more than doubled since January 2020 to more than 2 million.

6. Sustainable financing with a green future

Sustainable financing, together with ESG (environment, society, and management) commitments, must become an important part of the global banking sector. Several banks are already focusing largely on ESG liabilities.

 Goldman Sachs is investing $ 750 billion in climate change investment, financing, and advisory activities, including growth and other sustainable financing activities.

7. Fintech as a service (FaaS) platforms emerge

The pandemic has led to an increase in the use of digital platforms for payments, loans, insurance, wealth management, Roboconsulting, etc. and this has increased the need for technology-backed banks. As fintech technologies provide a solution for traditional banks to integrate and leverage advanced business opportunities and financial processes, many fintechs are emerging as service platforms. They offer their APIs as software to other financial market participants for integration into their systems, and a new model, the emerging Fintech-as-a-Service (FaaS), is something to keep an eye on in 2021.

To recover from the adversity of the COVID-19 pandemic and keep pace with the high demands of a dynamic banking sector, the retail banking sector must undergo a fundamental transformation that will surpass its previous efforts. In the new era, the banking sector will have to take advantage of technological advances and work with healthy competition to develop resilient business models that enable them to be relevant for years to come.

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