The year 2020 is something we’re used to hearing about in sci-fi movies — but the new decade is already here. Along with a fresh decade comes exciting new banking trends with the potential to completely transform the financial industry. It’s important for new and existing banks to be aware of these trends so they can prepare their businesses for the future. Here’s what to expect from banking in the future.
A Demand for a Personalized Customer Experience
Banks can now create extremely personalized customer experiences by leveraging the vast amount of consumer data out there. Banks have access to more data now than ever before, helping them learn about customers’ lifestyle, financial assets, geo-locations, favorite brands, and more. When they use this information responsibly, they can deliver a user experience tailored to the bank member’s lifestyle and preferences — and possibly inspire lifetime brand loyalty.
The Future of Banking Technology
Advanced banking technology has the capacity to process payments instantly or in a single day, and customers have come to expect that from all financial institutions. As digital-first banks like Chime and Acorns hone in on the need for quick functionality, banks functioning on a traditional model will need to adapt to the future of banking technology as well. Banks will need to focus their marketing efforts on younger bank users who might not be used to traditional banking methods, and should instead emphasize their advanced banking technology offerings.
A Generation Z Customer Base
Generation Z has grown up with the internet at its fingertips, and has become accustomed to managing essential tasks in a few taps on a smartphone. Because Generation Z will soon own this percentage of wealth in the United States, it’s important that banks focus on catering to this demographic. People in Generation Z were born between about 1997 and 2012, so the oldest members of this generation are in college, just finishing college, or beginning to save for college. But studies have shown that this generation is more fiscally conservative than older generations, and is wary of taking on debt. Banks can focus on helping Generation Z build credit and provide for their future in a responsible way.
Fintech Companies Are Taken Seriously
Big banking institutions have dominated the industry for decades — and while they have a lot of influence, they are not always willing to adapt to technological changes. Fintech (financial technology) companies have taken advantage of this service gap by offering customers faster, simpler ways to manage their money from their smartphones. Because fintech companies aren’t tied to traditional structural operations and mountains of red tape, they can also get new products or services in customers’ hands faster. Fintech companies can combine the experiences customers want — like virtual assistants, intuitive apps, and automatic transfers — in one easy-to-use package. Big banks can’t ignore that anymore.
Banks Forming Strategic Partnerships
While big banks struggle to provide the fintech level of service, some are making up for this by forming strategic partnerships. When a bank merges with a company that specializes in something different, they also merge their capabilities. This gives them the resources to deliver more customized solutions and experiences to the members of their bank. Just last year, the industry saw one of the biggest mergers in history when Fiserv acquired First Data for $22 billion. From this strategic merger, the fintech giant Fiserv gained control over First Data’s widely used payment processing systems, further expanding their reach and influence.
BMA Core Technology provides the advanced technology new and existing banks need to successfully carry their operations into the financial future. Our core processing software can help you offer your customers everything they expect in 2020, like online and mobile banking solutions, fast item processing, and more. Contact BMA today to request a demo.