Although the pandemic has accelerated digital transformation in the financial industry, many organizations still face significant-tech debt, and many CFOs are committed more than ever to continue to innovate.
Customers today increasingly expect a digital-first customer experience. The days of going to a local bank branch to get financial services and products are numbered. Fintechs have stepped up to the plate, transforming the market and meeting rising digital demand. Waiting to innovate is no longer an option for traditional banks and lenders; it is required to remain competitive.
So, what’s next?
Here’s a closer look at some technology trends that will have an impact on and revolutionize finance in the future.
To make good use of data, you’ll have to add value and build trust.
Financial service providers have used advanced data analytics to provide more personalized products to their customers. And consumers have been supportive as long as they see a benefit. Experian, for example, found that 42 percent of consumers would share personal data, and 56 percent would share contact information if it improved their experience in 2021. This report shows a growing rift among consumers and financial service providers. First, they want more personalised experiences, but they are picky about who gets their data.
Consider a recent McKinsey study, which found that 44% of consumers do not fully trust digital services. As time goes on, organizations that want to build and maintain consumer trust will need to be more thoughtful about the data they request and more transparent about how they intend to use it.
Expanding AI use while seeking ROI
The use of AI has been beneficial in a number of ways, from powering new recommendation models and chatbots to preventing fraud in the banking industry.
However, there is still so much more that organizations can do, particularly with the AI that they already have. Financial services and fintech firms have poured vast sums of money into AI solutions. Nevertheless, only 20% of AI models are employed to their full use. Furthermore, the current average return on AI investments is around 1%. Expect to see more organizations this year examining the ROI of AI-powered technology and looking to get more out of their investments. Technology partners can assist by identifying additional opportunities for AI models to drive customer engagement, validate credit scoring, and protect businesses from fraud.
Banking-as-a-Service will increase options and competitiveness
Traditional financial service organizations have long faced significant barriers to entry from new competitors. However, the advent of open APIs and Banking-as-a-Service (BaaS) breaks down these barriers, resulting in a substantial influx of startups that provide banking-like services. And this wave of new fintech has piqued the interest of consumers.
Consumers have demonstrated a willingness to try financial service products from various providers; they are not confined to traditional banks. The gold rush to BaaS, on the other hand, will produce a few winners and many losers. In the short term, the question is who will survive in this crowded market.
Consumers will also learn how many financial institutions to connect with and when to stop.
Performance Canvas Financials: Your Best Financial Forecasting Tool
These critical technological trends are bringing new solutions to long-standing consumer needs and new opportunities for organizations to improve their services in the process. Organizations that keep up with these trends will lay the groundwork for their next generation of customers and their company’s future.
CFOs can make excellent strategic business decisions with Performance Canvas Financials´ (PCF) accurate and real-time data. PCF is a cloud-based software for financial reporting, budgeting & forecasting, and consolidation. It optimizes and automates your financial and sales data so you can squeeze key business insights quickly and easily.
PCF is used across industries, with the majority of its users today belonging to the manufacturing, hospitality, retail, and lumber industries. While PCF is ERP system agnostic, most PCF customers today use SAP B1, Epicor, and MS dynamics ERP systems.
Learn more about the PCF solution for FP&A process innovation, quality, and automation. Get in touch with our team today if you’d like a free demo.