Online Banking: Digital Trends for 2022
The epidemic is already being seen as a watershed moment in the history of banking, owing to the convergence of dynamics changing the sector. COVID-19 has prompted banks to be more proactive, to re-examine long-held beliefs, and to be more adaptable and inventive.
Rather than looking back on their accomplishments, people are more prone to look forward to the chances that lay ahead.
In 2021, banks were challenging several long-held beliefs. They realised they had the ability to morph far more rapidly and dramatically than they had anticipated. Additionally, they are refocusing their digital innovation efforts from improvement to invention. Online banking innovation has become a must do thing. The evidence of this is all around us, as banks forsake outdated ideas in order to rethink banking from scratch.
We’ve picked the top ten trends that, in our opinion, will have the most impact on banking in 2022 and creating an exciting new future for the industry.
#1. Verification of Identity Using a Hybrid Technique (IDV)
Financial institutions may also expect major advantages from a reform in their approach to Identity Verification in terms of improving the client experience (IDV). Numerous studies have highlighted strong application processes as a necessary component of online banking and the fintech industry’s adoption. As a result, secure and seamless IDV through open banking or data sharing initiatives is predicted to be a huge success. Although many financial institutions have already migrated to online identity verification in 2021, having a hybrid AI-backed identity verification service will be a big trend in 2022.
Hybrid IDV integrates human labour to cross-check the AI-generated verification findings. As one of the most prospective digital banking technologies it decreases the likelihood of mistakes, hence improving the end-user experience. As a consequence, businesses not only avoid pushing back against on-the-go clients, but also achieve a greater conversion rate.
#2. The “Netflix Effect”
By 2022, the fintech and banking industries will have embraced one of the most extraordinary online banking trends – the”Netflix effect.” Modern customers need an experience in which banks and fintechs think for them and, like Netflix, provide personalised suggestions. Just as Netflix gains insight into what consumers want to watch based on their daily watching habits, fintechs may assist banks in gaining insight into their clients via daily transaction data and spending patterns. When banks have a deeper understanding of their consumers, they may assist them in improving their financial life.
Banking in the future will be more about beneficial interactions between the bank and the consumer, in which the bank suggests the appropriate product, financial advice, or customised financial services depending on the customer’s requirements. Banks may delve further into their client relationships and uncover opportunities to suggest related services, such as a home renovation loan or an automatic savings program, to assist customers in meeting their financial objectives.
#3. Artificial Intelligence ChatBots for Immediate Assistance
Customers want rapid assistance at any place, at any time of day. For example, 49% of consumers say that rapid service is crucial for developing client loyalty. While the phrases “instant,” “anytime,” and “anywhere” may seem that completely implementing this customer experience trend in banking is impossible, technology may considerably ease the load.
Chatbots powered by artificial intelligence are the response to basic inquiries rather than FAQs. When used properly, they may be quite successful even in the absence of a customer service manager. Not only are chatbots advantageous to customers, but also to the banking industry, since they alleviate time limitations associated with fundamental enquiries. Additionally, 64% of consumers believe chatbots’ 24-hour availability is highly beneficial. So, chatbots can be considered banking industry trends of the last couple of years.
#4. Increased ESG and DEI
Environmental and societal challenges have never been more critical. Consumers, investors, and job seekers will put a higher premium on firms’ environmental, social, and governance (ESG) and diversity, equity, and inclusion (DEI) initiatives in the coming years. During 2022, financial institutions will have more alternatives than ever before for differentiating themselves from the competition and meeting community needs. Using the latest trends in banking technology, financial institutions will be able to communicate the outcomes of their ESG initiatives to the public through data and analytics, ensuring that sustainability remains a priority. Climate change, social challenges, and other facets of sustainability will continue to gain prominence as banks and credit unions see ESG as an opportunity rather than a danger.
Financial firms are gearing to increase accessibility to have vowed to share their DEI statistics in order to promote transparency in response to rising demand for more gender and racial diversity at management and board levels. Government organizations have paved the way for investors and asset managers to bolster their ESG disclosures and continue their efforts to address DEI issues.
#5. Concentrated effort on big data and analytics
Banks will be able to place client behaviour at the core of their business models because of big data. By using predictive analytics, they can give more tailored services and increase revenue.
Successful digital transformation in the future will depend on how much a bank can learn from its clients. Analytics will become critical in client acquisition, market segmentation, and cross-selling initiatives. As a consequence, banks will have a deeper understanding of customer behaviour and spending patterns, which will enable them to design more tailored goods and services.
In 2022, more “closed-loop” systems based on rapid and easy data collecting will be available. This enables banks to develop a holistic understanding of their clients’ requirements, giving contextually relevant information regarding discounts or customized offerings. It is also believed that all future trends in banking will be connected with big data and analytics.
#6. Banking applications as intelligent digital assistants for consumers
Banking applications will transit from being purely self-service tools to customer relationship management systems that anticipate the consumer’s demands and provide tailored advice depending on their financial condition.
The banking software will evolve into one of the latest banking technology trends – ‘smart digital assistant,’ capable of ‘understanding’ the consumer’s wants and preferences over time based on their financial activity. For instance, if you consistently send money to your savings account on payday but fail to fill up your payment card with cash for the next month, the smart software will be able to forecast that you will soon need money for your card.
The intelligent assistant takes proactive measures by engaging with the consumer and recommending possible actions before the customer even realizes it.
#7. Rapidly developing blockchain technology
Among new trends in banking, there are several applications of blockchain technology that have the potential to improve operations and customer experience. In 2022, blockchain technology will be used in a wide variety of financial services, not simply transactions and money transfers.
We will witness a rise in the usage of blockchain technology for client onboarding and due diligence.The broad use of digital identities is likely to result in financial institutions decentralizing their KYC (know your customer) and customer due diligence operations.
These platforms are intended to use distributed ledgers to store client data, allowing more effective identity verification during know-your-customer (KYC) checks, cheaper data storage costs, and enhanced data security procedures.
The blockchain technology is projected to be utilized to facilitate the issuing, trading, and settlement of securities. This will be facilitated by new securities legislation, which will permit the use of tokenized assets in existing financial markets.
The development of transaction processing solutions based on blockchain technology. The additional blockchain-based transaction processing solutions are projected to be available on the market. However, blockchain-based transaction processing platforms will be considered as complements rather than replacements for conventional settlement systems.
In 2022, it is anticipated that the number of competitors attempting to join the market will expand, leading to more regulatory coordination and standardization initiatives. The partnership will focus on developing a regulatory framework that would allow for the coexistence of blockchain-based digital currencies and more conventional forms of money issued by central banks.
#8. Elimination of cognitive load and busy work in daily banking
People are busier than ever and often feel overwhelmed by the digital buzz and cognitive load associated with maintaining the specifics of the multiple displays, applications, emails, messages, and notifications they see during the day. Banks and fintechs are increasingly attempting to use new banking technologies to transfer the load away from the client by automating the “busy labor” of personal financial management. Banks may also employ helpful “nudges” to assist clients toward greater financial well-being by alleviating their cognitive burden and providing a more frictionless experience.
For instance, when clients have a simple way to enroll in automatic savings plans, they are more likely to do so. When clients can apply for a loan easily online, they are more likely to apply and get the best financial solution for their circumstances. Eliminating unnecessary labor enables consumers to connect more quickly with the correct product at every point of the customer journey.
#9. Increased growth of fintech
Fintech growth in 2021 has surpassed all previous records. Fintech-focused startups accounted for 33% of all new unicorns globally in the past three months – digital banking trends were seen everywhere. Additionally, we’ve witnessed a slew of fintech initial public offerings (IPOs) and significant mergers and acquisitions (M&As). Fintechs now have a bigger chance for development than ever before, but this has increased market rivalry; the difficulty for fintechs in 2022 will be distinguishing out and prioritizing clients.
#10. Teaching financial prosperity through digital skills
Communities that have historically been disadvantaged by the old financial system often benefit from financial education, which also applies to understanding new digital technology. Mastercard’s Center for Inclusive Growth has developed an online financial wellness program to assist individuals in achieving financial wellbeing. 64% of participants said that the training improved their financial health, 50% reported feeling more secure, and 50% reported feeling more at ease handling their money online.
In 2022, it is expected to see an increase in digital solutions concerned banks and technology that place a premium on financial education, whether for first-time users or long-term bank clients looking to get the most out of their money.
This year offers financial institutions a huge chance to future-proof their systems. The trends in online banking mentioned above demonstrate the industry’s trajectory, and forward-thinking financial institutions will adjust to meet expectations. A more robust set of business tools to stay up with market developments and client expectations is needed and PayDo is a great solution both for business and personal use. Create your multi currency account and get a convenient method for accepting and making payments all around the world.
Security and trust are always at the top of the priority list for PayDo.By adopting a digital-first strategy, implementing sustainability efforts, and streamlining procedures for both customer and employee experiences, it is possible to remain ahead in competition in an ever-changing market.