Dec 19 2019

5 Financial Services Tech Trends to Watch in 2020

AI, blockchain and automation are among the trends poised to alter the financial services industry.

The financial services industry has been permanently changed by technology. Gone are the days in which customers had to drive to their local banks to make transactions or manually balance their checkbooks. Fintech has made managing finances simple, with access to all kinds of accounts just a click away.

But new apps aren’t the only technology that’s shaping financial services. Banks and other firms are using new tech in many ways to improve the customer experience, streamline their own processes and expand services. By tapping into artificial intelligence, data analytics and blockchain technology, the industry is primed for a transformation. These are the tech trends to watch for in 2020.

1. The Role of Artificial Intelligence in Finance Will Expand

The use of artificial intelligence has touched nearly every industry, and the financial sector is no different. Some of its uses have been around for a while, like using AI and predictive analytics to determine who should be able to pay back a loan, but that use has expanded as banks have gone digital. 

AI now helps chatbots give informed financial advice, aids in fraud detection and can even help guide customers’ investments. A study from Accenture found that 54 percent of bank customers wanted tools to help monitor their budgets and make real-time adjustments, with 41 percent saying they were “very willing” to take financial advice from AI. Personalized, real-time advice is a need that’s only growing, and AI will drive those tools for financial services firms. 

2. Financial Services Firms Will Grow Their Use of Data Analytics

The financial services industry has been a leader in the adoption of advanced data analytics, having long used it to help make lending decisions. But as technology has expanded with the Internet of Things and various digital devices, there’s been more information available for financial services firms to track. Now, information from every swipe of a credit or debit card can be collected, allowing businesses to easily detect irregularities or fraud and better assess risks.

This has been helping banks in a number of ways. IBM found that 71 percent of banks and finance organizations that used analytics said that it gave them a competitive advantage. As they gain insights into their customers’ behaviors, banks can use them to enhance the branch experience as well. Organizations will find more and more ways to use this information to tailor products and services to their customers.

3. Blockchain Will Be a Key Security Solution

Blockchain has been on the financial industry’s radar for a while, but now it’s set to explode. No longer just for cryptocurrency, the technology is ripe for use as a security solution, with multiple points of verification built in to every transaction. That multipoint verification secures the information being transmitted and creates detailed records every step of the way. This can be comforting for those looking to move large amounts of money. 

Blockchain also saves money. Because the technology makes peer-to-peer transfers in a decentralized network, there’s no intermediary to charge fees. From monetary transactions to transferring contracts, financial services firms will be utilizing blockchain technology more as popularity grows. 

MORE FROM BIZTECH: Learn about how bank cafes are using engaging tech to attract younger customers.

4. More Bank Branches Will Undergo Digital Transformations

As mobile banking has grown in popularity, banks are taking new steps to enhance the branch experience. Branches may not be able to compete with the convenience of a customer having ready access to all of their accounts in the palm of their hand, but they can add value to the act of physically stepping inside the branch.

Digital signage will bring a more interactive experience to branch visitors. Mobile devices to help with certain tasks will help move customers through processes quickly and efficiently. Employees can roam the branch freely with iPad devices hand, helping people wherever they are. As customers move more and more toward online banking, branches will harness technology to build a better in-person experience.

5. Automation Will Take Over More Financial Services

There are many industries clamoring to make the best use of automation. Automating tasks can get things done faster, more cheaply and more accurately, increasing efficiency. Financial services firms are also trying to harness this power, particularly through bots. Many customers are familiar with interacting with bots to answer their questions, but banks and other financial firms can also use them to automate some internal tasks, like responding to IT tickets or in accounts receivable.

The Australia and New Zealand Banking Group deployed robotic process automation and saw a 30 percent cost savings in some functions. The group automated more than 40 different functions, freeing up staff to take on more complex tasks. As technologies like RPA evolve to become even more efficient, financial services firms will find more ways to capitalize.

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