As technology has developed, the banking industry has evolved with it. Experts predict this pattern will continue in 2020 and the upcoming decade. Other factors will also play a role in changing banking and finance from the inside out. These aspects include environmental, geopolitical, and economic issues. Industry specialists forecast some widespread patterns rippling throughout banking around the world. Here are some important banking trends expected in 2020 and into the new decade.
1. Banks will increasingly use blockchain technology.
Blockchain technology was initially used with Bitcoin, a cryptocurrency. It is an advanced tool that tracks operations and processes in a quantifiable, permanent way. Data in blockchains is safe and easily accessible. It will make banking transactions easier and more convenient for customers, and experts predict more banks will begin using this technology to increase their levels of service.
2. Cloud banking will improve efficiency and lower costs.
The trend in cloud banking is expected to continue and grow. The cloud saves financial institutions money because they only have to pay for the space they use for data storage, which makes quickly changing the usage scale simple. Consumers will get round-the-clock financial services from anywhere. Banking in the cloud will erase borders and make international transactions much easier and more convenient as well as less expensive.
3. The banking process will become more open and seamless.
Technological advances will usher in a change to the actual process of banking. Banks that thrive in the years to come will make banking procedures fit seamlessly into the lives of private consumers and businesses.
For example, GBTI Bank uses advanced techniques and technology to provide high-quality electronic banking for its customers. It provides real-time account statements so customers can check the status of their accounts at any time. Today’s savvy consumers expect high levels of service, and customized, accessible banking will help keep banks strong.
4. Banks are increasingly investing in Artificial Intelligence.
Artificial Intelligence, also known as AI, has the potential to dramatically lower banking costs. A recent report shows that by the year 2023, banks may potentially save as much as $447 billion through using AI technologies. This cost savings comes in multiple ways.
- AI can handle repetitive tasks, freeing up humans for more creative work and personal interactions.
- AI can compile and quickly analyze huge amounts of information, increasingly referred to as big data.
- Chatbots and robots that interact with customers for quick help are forms of AI that deliver immediate customer satisfaction and can help maintain consumer loyalty.
- AI also helps banks improve security and uncover fraud.
Banks, though historically slow to adopt new technologies, are increasingly incorporating AI into their operations. A study by PricewaterhouseCooper discovered that 52 percent of financial executives are incorporating AI technology into their processes.
5. Cybersecurity for the financial industry will improve.
Just as emerging technologies can help banks, they also provide more opportunities for cybercriminals. A recent study found that a hacker attack occurs every 39 seconds. The sobering statistics continue. Another research study found that in 2020, on average, the cost of a single data breach will be more than $150 million.
It is good business for banks to expect and plan for data breaches and cyberattacks. Financial institutions will have to get increasingly creative and more vigilant in their efforts to ward off risks, quickly discover attacks, and recover from them.
6. Advanced platforms will help banks provide new services for small- and medium-sized companies.
Financial organizations are increasingly working with FinTech companies to create portals that provide valuable new services for small- and medium-sized businesses or enterprises, often referred to as SMEs. These companies need constant capital and support from banks, but not all institutions have branches everywhere, such as in smaller towns and rural regions.
Banks are increasingly forming close relationships with FinTech organizations to develop new ways for commercial customers to interact with banks. These alliances mean banks can launch new services and products for SMEs quickly and efficiently, and they also provide other benefits to smaller commercial customers.
- Flexibility on loan repayments
- Reduced paperwork
- Looser credit profiling
- Economical interest rates
This valuable sector of the economy can expect increased services tailored to their needs to help them navigate the sometimes stormy economic waters.
7. The overall principles of banks may shift.
As consumers grow increasingly interested and concerned with issues such as environmentalism and the climate, economic specialists expect banks to shift their purposes from purely economic viewpoints to being part of the greater good. Issues such as social and economic equity, climate change, and protection for wildlife and the environment will become more important to banks.
The banking industry will continue to evolve in the wake of advancing technology. Financial institutions will use developments to provide better services to individuals and commercial customers, and their principles will probably change and begin to reflect the general values of the day in order to stay viable with modern customers. People need the basic services banks provide, but the very fabric of the industry is being forced to alter through technology as well as modern beliefs.