What are the most important trends in the financial services industry?

Organizations in the financial industry and IT companies providing solutions for this sector drive each other's growth. The need to increase the competitiveness of a given company requires the implementation of newer and newer systems and tools. Discover the most interesting trends in the financial services industry.

Challenges of the modern banking and financial industry

Companies in the financial industry face many difficulties. Just operating the software necessary to provide modern financial services requires an adequate budget and an experienced team. The biggest challenges that banks and other financial organizations face include:

  • Providing high-quality customer service. Competition among companies in the financial sector is growing, which is why more and more companies are exploring new technologies and introducing advanced solutions that will make it easier for customers to use modern financial services.
  • Guaranteeing safety for customers and employees. The development of analytics based on artificial intelligence allows systems to be monitored more effectively for suspicious activities. Hackers are also gaining new skills, making it necessary to create new solutions and techniques to prevent cybercrimes.
  • Implementation of new technologies. Digital transformation of business requires not only time but also an appropriate budget and maturity of an organization. Implementation of new solutions involves intensive work of many teams and must be carefully planned.
  • Compliance with regulations. Compliance with regulations related to the provision of services and data processing has become one of the most important challenges for the financial sector. There are an increasing number of regulations that banks, credit unions, and other financial companies must comply with. Compliance can place a significant strain on resources and often depends on the ability to correlate data from different sources.

Developing a company's IT infrastructure increases business flexibility and allows employees to respond more effectively to market changes and customer needs. Creating a top-quality corporate website or upgrading an old one is an important step in the digital transformation of a company. Before starting with a new web page or applying changes to the existing one, it’s worth analyzing current and future trends that could be used.

Financial services industry trends in 2023

The financial industry refers not only to banks but also to investment organizations or fintech companies. This means many different business models, types of products and services, and a different approach to customers. To stand out from the competition, brands need to use cutting-edge technologies. Which of these can be considered the biggest trends in today's financial services sector?

1. Customer communication bots

The use of modern methods of communication with customers is an important trend nowadays. The solutions used include chatbots (both simple and advanced ones), voice bots based on artificial intelligence, virtual assistants, and live chats. All these solutions are aimed not only at increasing the availability of customer support by reducing the load on call centers but also by providing professional assistance around the clock.

KBC Bank has a live chat on its website for communication with clients

Source: KBC Bank

A company can design its own chatbot or integrate its website with one of the services available on the market (from providers such as Tars, Haptik, or Growthbotics). Bots and live chatbots aren’t only a convenience for customers, improving their experience, but also a solution to help a company reduce customer service expenses. Automation allows robots to take over some of the tasks previously performed by live employees of financial services companies. Robots (including voice ones) can perform customer authentication and surveys, answer user questions, solve some of their problems, and even sell. Such solutions won’t completely replace contact with a live company representative, but they will effectively relieve your team.

2. Exchange of data between service providers

The need to be able to exchange information with other banks is regulated by the PSD2 Directive. Open banking is financial services that are based on banks providing third parties (TPP) with information about their clients' accounts. This is a new trend in banking, arising directly from current legislation.

Customers of various banks typically use multiple applications. Open banking makes it possible to view different bank accounts, as well as loans (including mortgages) and credit cards, in one place, using an application of one of the banks, and even manage these products (e.g., order transfers from all accounts). Implementing services from this group improves the customer experience, increases customer loyalty, and makes it easier for customers to use their products.

3. New methods of mobile payment

Customers want as many options as possible to transfer funds and pay for given services. The e-wallet payment option is becoming more popular, so companies are increasingly choosing to integrate this method into their software. The user of this type of application only needs to top up their account and make a payment, and the recipient will receive the funds immediately. This means that companies creating fintech solutions must ensure the possibility of communication between their applications and e-wallets, as well as develop their own tools of this type.

Newer mobile payment applications, such as Google Pay and Apple Pay, which work similarly to e-wallets, are also springing up. Fintech companies are building such solutions, equipping them with various functions to help users better manage their budgets.

Blik is a type of instant payment that is available and quite popular in Poland but is most likely soon to appear abroad. No login to the bank's website is required. The customer generates their one-time payment code with a single click on the mobile application. The funds immediately appear in the seller's account. In this way, you can pay for purchases in stationery shops and marketplaces and also instantly transfer funds to other people (directly to their accounts or in cash, which can be withdrawn from an ATM with the use of a code).

BLIK is an easy and fast solution for mobile payments

Source: BLIK website

4. Asset tokenization

Tokenization of assets aims to enable peer-to-peer transactions without intermediaries. The term tokenization refers to converting physical and non-physical assets into digital tokens using blockchain technology. Various assets can be subjected to this process - the most common are shares in companies, bonds, real estate, precious metals, and works of art.

Tokenization and blockchain, in general, involve both risks and opportunities. Organizations choose to do this for several reasons. After tokenization, the value of assets can be divided into multiple shares, making them available to investors with limited capital. This allows those with limited budgets to enter the investment market and raise the funds needed to grow the business more quickly.

Tokenization of assets makes them easier to trade and allows a given investment to be made available to an unlimited number of potential investors, removing geographical boundaries. Tokens can be purchased easily from anywhere globally by registering on the platform that serves this purpose.

5. Analytics based on artificial intelligence

There are many types of analytical techniques used in the business world. In financial and banking companies, analytics is used in many ways. One of the most important uses is cybersecurity systems. Solutions based on artificial intelligence and machine learning are able to recognize patterns and identify deviations from them (unusual behavior of system users or suspicious transactions). This type of software can detect system security breaches, phishing attempts, financial frauds, etc.

Data analysis by artificial intelligence systems also makes it possible to create detailed reports on the basis of big data - unimaginable amounts of structured, unstructured, and semi-structured data, the interpretation of which couldn’t be handled by less advanced tools. In this way, you can create attractive reports to be presented to your customers and gain valuable recommendations that will help increase efficiency and reduce expenses in a given enterprise.

6. Personalization of customer experience

Content personalization based on historical and real-time data positively impacts user experience. By tailoring the messages displayed to their needs and expectations, they feel better understood by the brand, which creates a stronger bond and loyalty. It also makes it possible to strengthen the effect of marketing campaigns.

However, content isn’t the only element that can be tailored to users' expectations of financial services products. Thanks to behavioral analysis (analysis of user activity and preferences), recommending offers with greater accuracy increases the likelihood of a purchase. Such advertising also has a second important advantage, reducing the likelihood of creating negative impressions by displaying proposals that don’t match the potential customer's expectations. An example of personalization could also be implementing a solution that formulates financial advice to users based on their account history (expenses, receipts, internal transactions). Investment or expense management advice could be made visible to the customer after logging on to the bank website. These measures prevent churn, increase customer loyalty to a given company and better motivate them to make a purchase.

7. Automation

Automation involves taking over some manual or repetitive tasks by robots and systems. Thanks to this procedure, live employees can focus on tasks requiring creativity and human intelligence. An additional advantage is reducing the number of mistakes.

Automation is already widely used in marketing in various industries (through mailing systems, social media, and other communication channels), but the solution has many more applications. The document verification process can be automated. This would significantly speed up the approval of applications for loans or payment of compensation. Modern software can also be used for better budget management and automatic payment planning.

Future of financial markets

Some of the technologies mentioned above will undoubtedly have a major impact on the future of the financial industry. These have been operating in the financial services market for some time, and their popularity is increasing over time, while companies are only implementing others. Undoubtedly, machine learning is becoming more accessible to companies with various budgets. Thanks to this technology, banks (and not only) can offer potential customers personalized experiences and recommendations - not only offers but also advice on managing their finances. Thanks to advanced analytics, applications and websites of banks are no longer just a tool for ordering transactions but a functional centers for managing a household or company budget.

Blockchain is the trend most companies working with cutting-edge technology are focusing on. As the concept itself is quite complex, and most countries in the world don’t yet have the relevant legislation to regulate the use of blockchain in business, it’s a high-risk technology. However, undoubtedly, it has great potential and will be developed in the future by financial companies.

In the future, we can also expect the use of the Internet of Things, personal gadgets, and sensors (e.g., in cars, homes, offices, and factories) in the financial industry. The data collected could be used, among other applications, in the insurance market to make decisions on compensation payments in a more efficient and fair way. This would undoubtedly reduce customer frustration in this industry and increase transparency between them and service providers.

The availability of mobile financial services is also likely to increase in the coming years. This will result from expanding the 5G network infrastructure (this process has already begun). The result of such action by internet and telecommunication service providers will be the possibility to use banking and financial services without any delay and anywhere using various mobile devices adapted to use 5G technology (e.g., smartwatches, smartphones).

Financial services industry trends in 2023 - summary

Some of these modern technologies can be used when developing a website. Our team can design a website for a financial services company that will efficiently display large amounts of automatically updating data in the form of charts and tables. We can also equip the web page with powerful analytical tools. In addition, we can create useful financial calculators for your customers, implement loyalty programs and integrate your website with the tools you use on a daily basis.