The banking industry is experiencing a technological overhaul. With the FinTech sector on the rise, there is more demand than ever for innovation in banking. Banks need to be highly adaptable to succeed during times of disruptive technology.
Technologies in the banking industry will only continue to evolve. Three prominent innovations in 2021 are artificial intelligence, DevOps, and omnichannel strategy. Each comes with its own strengths, benefits, and use cases.
The evolution of technology is reshaping the banking industry. In this article, we will discuss each of these innovations and why they are so important. Plus, we will cover how banks can leverage these innovations for their own success!
The Impact of FinTech on the Banking Industry
Before diving into the 3 main banking innovations of 2021, let’s explore the impact of FinTech.
In simple terms, FinTech is the union of finance and technology. At its core, FinTech aims to bridge the gap between tech and banking.
Financial institutions have historically demonstrated resistance to technological advancements. Finance is a sensitive matter with many security considerations.
Embracing new technologies would mean restructuring the entirety of traditional banking methods.
Enter FinTech – an industry designed to help integrate technology into financial services.
From 2018 to 2021, the number of FinTech startups worldwide more than doubled.
Additionally, the global FinTech market is expected to reach a value of more than $3 billion by 2022.
There’s no denying that technology has become a major player in the banking industry. With this in mind, let’s take a look at the three major banking innovations to pay attention to in 2021.
The 3 Innovations that Will Impact the Banking Industry
Understanding what these innovations are and how to employ them is key. Though they are all different, they work together and complement one another. Using all three helps to build more collaborative and successful work environments.
In this section, we will define exactly what the innovations are, as well as use cases and benefits.
1. Artificial Intelligence
Artificial intelligence (AI) is a disruptive technology across all areas of business.
A major advantage of AI is that it can help with front, middle, and back office projects. AI can optimize back-end processes while also enhancing the customer experience.
Plus, AI has proven to be effective in managing risk and generating revenue.
Here are three primary use cases for AI:
- Chatbots: Responsive and intuitive AI helps create chatbots. Examples of how to employ chatbots include virtual shopping assistants and customer service. Chatbot AI helps to manage customer interactions and ensure speedy response times.
- Risk Management: Risk management can get expensive. AI and machine learning helps lower operational and regulatory costs.
- Support and Automation: AI helps to support your platform and applications. It can help automate necessary processes and systems. This gives your team more time to focus on clients.
2. DevOps
When dealing with banking technologies, there is a major need for software development.
Applications and platform design can significantly impact customer impressions. Plus, customers in the digital age have come to expect efficient software deliveries.
DevOps is derived from both technical practices and development philosophies. These practices and philosophies place customers as the main focus. Every piece of software is thus designed with the customer in mind.
In banking, DevOps can be used for:
- Continuous Development: Software and technology are ever-evolving. DevOps helps banks establish a system of continuous development. This helps the bank to keep up with changing trends and demands.
- Faster Deliveries: Customers value efficiency. With DevOps, the development lifecycle can be shortened without sacrificing quality.
- Better Analytics: DevOps relies on real-time information and analytics for feedback. Using DevOps allows banks to level up their analytics department as well.
3. Omnichannel Strategies
Omnichannel is a strategy that helps clear your channels of business and communication.
Business channels are the contact points for your business. This can include an online platform, call center, or customer support.
With an omnichannel strategy, all your channels will be unified. It will enable customers to access services through all channels. Plus, employees will have clearer lines of communication across departments.
- Creating a Collaborative Culture: Omnichannel is all about enhancing communication and contact. This strategy pairs well with DevOps when fostering a collaborative work environment.
- Enabling Cross-Functionality: Through heightened collaboration, employees will learn new skills and proficiencies. Having a team that is cross-trained in both finance and tech is essential.
- Unifying the Customer Experience: Omnichannel allows customers the best access to your business. With omnichannel, customers can access services and products through all channels. This consistency enhances the customer experience.
Final Thoughts: How Banks Can Leverage Innovations
Banks must consider how innovative technologies will benefit their business and customers.
All three innovations listed above help to enable:
- Remote Work Environments: By embracing remote work environments, banks can reduce operational costs. This comes at no consequence to the customer, who has access to services through all channels.
- Greater Customer Value: AI and DevOps reduce wait times and boost customer support. This results in a greater overall perceived value from customers.
- Heightened Productivity: AI, DevOps, and omnichannel work together to empower your teams. With these innovations, your business productivity can reach new heights.
- Stronger Security: The biggest concern with FinTech is financial security and compliance. These innovations help achieve automatic regulation of your systems.
Technology will only continue to dominate the financial industry. For banks looking to prosper in 2021, embracing innovation is the key to success.
