The advancement of technology and new business models will have an important impact on the actions of banking in 2020. These are the 10 trends and challenges in which private investors and SMEs operate in this new scenario.
The danger of technology
The entrance of the BigTech, although it is taking place slowly, persists as a threat to the bank. In fact, 45.8% of managers in the sector perceive them as a disruptive force. In 2020, companies like Google or Facebook will not launch their banks, although they begin to position themselves in the traditional business.
For example, in the case of Paypal, your line of credit has “attractive” incentives that reduce the need for customers to go to commercial banks to ask for loans.
37.5% of executives in the international financial sector believe that BigTech will contribute to the banking ecosystem in 2021.
Open Banking
The digitization will be reflected in 2020 in the deepening of the open banking models thanks to the use of open technologies that allow external developers to create applications and services around the entities.
The regulation and the need to collaborate with the FinTech will allow a wide variety of more innovative and nearby services, which will be available in the form of applications hosted on their platforms.
Solutions in the cloud
The rise of the cloud, to gain operational efficiency and agility in products and services, will mark the actions of commercial banks with the approval of the regulatory authorities.
Models such as Software as a Service (SaaS) will continue to penetrate new software architectures and data management.
New operating models
The emergence of new operating and business models is one of the challenges facing retail banking. The dynamism of the sector means that the revenues or margins of the entities can decrease if they do not already drive a transformation of processes and business areas.
Among the main challenges related to the new formulas, banks must boost revenues from non-banking services, monetize the use of APIs and automate systems to save costs.
Digital transformation
The year 2020 brings a generalized acceleration of efforts in virtual transformation in areas such as the digital experience of the user or the automation of some office tasks. This shift towards is driven in part by the transformation of the experience of customers who increasingly access banking through mobile applications.
Blockchain technology
The financial industry will promote further research and application of blockchain technology, especially in the areas of risk management, fraud detection and implementation of Know Your Customer (KYC) requirements.
Experts believe that this blockchain technology will be especially significant for distributed accounting.
Voice assistants
The voice assistants are clearly consolidated as a new channel for banking, and the entities will deepen their sophistication and maturity.
Some large banks such as Bank of America or Barclays already allow interaction thanks to voice assistants such as Alexa or Siri to make payments or check movements.
Artificial intelligence
The entities will continue betting on artificial intelligence to better understand the customer and delve into greater personalization of services.
In this sense, the use of technologies such as chatbots, voice assistants, identification systems and biometrics, among others, will allow a great saving in estimated operating costs of 20% in 2030.
Invisible banking
2020 brings the rise of invisible banking, as banks increasingly integrate their financial services into the lives of customers thanks to technology.
The sector will be “more imperceptible than ever” in the day to day, because it will be embedded in other services, as it happens already in the means of payment.
Cybersecurity
Finally, this year banks are expected to put more efforts into infrastructure and cybersecurity measures to protect sensitive information from their customers’ accounts.
Guaranteeing the security of data and operations in the face of the greater risks of cyberthreats, both in terms of frequency and typology, is one of the biggest challenges in the sector.
Also published on Medium.