Don't let Wells Fargo fool you — not all trends in banking revolve around screwing the customer. In fact, convenience is at the heart of where banking is heading. But what other developments in the banking world are worth monitoring?
These industry insiders let us know where to direct our attention. Here's what they have to say:
1. Per Christian Goller, CEO at Aprila Bank
“All the things you know – digital initiatives, ventures into blockchain, trying to figure out what digital transformation means, frustration with the complete lack of really good and modern core banking systems etc. For Aprila Bank, our focus is on leveraging the distribution powers of our integration partners, re-bundling banking offerings into their systems. Giving SMEs superpowers to realize their potential without mortgaging their house!”
2. Shai Stern, Co-Chairman and CEO of CheckAlt
“More than 50 percent of all banks with retail, wholetail, and wholesale lockbox needs are at least partially outsourcing their processing, according to Aite Group research. Banks are continuing to outsource treasury and payment processing to simplify operations and reduce costs. Today, check processing services are more needed than ever because of the consolidation in the market and the complexities around receivables data. As more banks are looking to financial technology firms to address their electronic payment technology needs, the most appealing vendors are those that can also take on their lockbox processing.”
3. Chris Tremont, Executive VP of Virtual Banking at Radius Bank
“Customers no longer need to go into a bank to perform their banking activities. A digital branch takes all the traditional banking services and components that have historically only been available to customers at inconvenient times and locations and moves them to digital platforms, such as via online, a mobile app, or over the phone. Everything a customer would normally do in a physical branch is now at their fingertips, and goes beyond just checking a balance, including the ability to deposit a check, transfer money or pay bills. The convenience and seamless experience will drive consumer demand to go fully digital.”
4. James D'Arezzo, CEO of Condusiv
“Even without blockchain, the financial industry is being swamped by a tsunami of data, including new compliance requirements for customer privacy and constantly changing bank regulations. The banking industry is spending more on IT than any other industry, including healthcare and manufacturing.”
5. Patricia Russell, CFP, founder of FinanceMarvel
“Currently in 2019, we’re seeing the emergence of “fintech” and “techfin” companies. Popular fintech companies, being financial companies that happen to have strong technical backgrounds, presently include Venmo, Paypal and Zelle. They have huge customer bases, and are heavily focused on customer service. Techfin, on the other hand, are technology giants like Google,
Apple and Facebook who have incorporated finance into their revenue stream but were not built solely based on providing financial services to customers. Techin services like Google Pay, Apple Pay and GlobalCoin stand to really change the financial world as we know it because of what large social platforms they have and the “do-it-for-me” culture which has grown in popularity for not just Millennials and Generation Z, but also Gen-Xers and now Baby Boomers.”
6. Mads Hennelund, Advisor to Nextwork.as
“The comming PSD2 regulation and intergration is a big trend right now and banks are integrating with one another and fintechs. Either as broadbranded aggregators or vertical whitelabel providers. Some are even venturing into the position as utility banks that just provide for example a fintech with the basic banking infrastructure that the fintech then can provide for its target customer segment.”
7. Andrew Daniels, Managing Director for Degree 53
“User experience and modern design is what helps attract and retain customers. Any digital product development needs to begin with a mobile-first approach, especially for services that can be accessed on the go. Offering intuitive mobile banking options helps customers manage their finances more efficiently and builds loyalty with the bank.”
8. Frank McKenna, Chief Fraud Strategist at PointPredictive
“Lending volumes are growing – there was more than $584 billion in originations during 2018, one of the highest volumes in many years. As a result, there is a corresponding $6 billion fraud problem. Everyone wants to pretend they are rich when they are applying for a loan from a bank or lender. And that leads to lots of lies about income on applications for credit. In today's auto lending market up to one-in-three applications may involve materially falsified claims of income. Often called liar loans, income fraud is making a big comeback in the competitive lending market.
More people are lying about their income, and lenders are struggling to cope with it. So, they require borrowers to provide proof of their income usually with pay stubs from their employers. However, lenders are now finding that as many as one-in-five paystubs they receive for verification is forged. Machine learning technology is a technology lenders are embracing to detect fraud in loan applications.”
9. Logan Allec, Founder of Money Done Right
“As technology has advanced, banking has changed somewhat rapidly. One major example of this currently shaping the banking industry in 2019 is open banking, which allows third-party companies access to your banking information – with your permission.
The idea behind open banking is that information is used to develop new products and more helpful services that can create a better banking experience.
2. Transformation of Brick-and-Mortar Banking Locations
In 2019, banks are also trending towards hiring fewer employees, building smaller branches, and are relying on technology more than ever within physical bank locations. Some branches are even looking to provide services completely unrelated to banking, such as coffee shops in branches.”
10. Anthony Macciola, Chief Innovation Officer at ABBYY
“In banking, digital workers will be the backbone to delivering AI capabilities in the form of advanced cognitive skills. Digital workers with advanced cognitive skills use technology like OCR, machine learning, and NLP in combination with RPA to enable understanding and liberating meaning from data trapped in documents and automate tasks involving decisions, judgement or problem solving, essentially mimicking human intelligence. Content IQ at this level analyzes and understands text and can be an assistant to an
employee and/or customer.”
11. David Bakke, Writer at Money Crashers
“For 2019, banks will start or continue to use things like data analytics and artificial intelligence to glean in a more meaningful fashion what their customers want and expect from them, which in turn will lead to more targeted and effective product offerings. Banks will also more than likely continue to improve customer service levels, which in some cases had been lacking in previous years because these institutions know that other competitors are ready and willing to take on new business. You can also expect banks to continue to ramp up security protocols to maintain pace with increased hacking and other criminal efforts.”
12. Ashley Lomelin, PR Manager at Allegro
“Technology and distrust toward big banks is a trend favoring online banks in the upcoming years. With more financial services, such as Venmo and PayPal, already beating out some major names in the banking world, it's no surprise that this would lead to a spring in smaller banks. Each ensuring a more direct relationship with consumer to brand customer service, millennials are proving they are looking for more in a bank than just clarity and transparency – two keys also absent in big banks.”
13. Wes Garner, President of TDECU Wealth Advisors
“The biggest trend shaping banking in 2019 is that the consumer experience will improve. Banks have a lot of catching up to do when it comes to building trust, making things easier, and creating meaningful value. Consumers want transactions to be simple and they want better financial advice from their financial institution.”
14. Sanat Rao, Chief Business Officer & Global Head for Finacle at Infosys Limited
“Earlier this year, Finacle released a research report, Accelerate Digital: 12 Trends Reshaping Banking in 2019, which identifies the following 6 key technology trends for banking in 2019:
* Accelerating architectural evolution
* AI in the bank
* Steady advance towards public cloud
* Accelerating connected commerce
* Increasing interactive dimensions
And the 6 key business trends for banking in 2019:
* Transition towards platform business model will accelerate.
* Customer journeys will advance to the point of primary intent.
* Open Banking will make banks evolve their API strategies.
* Cyber-Defense vs. Hacker Intelligence
* Optimizing digital-human interplay.
* Prioritizing data privacy and ethics.”
15. Jordan Friedman, CEO of Zodaka
“Financial Technology (Fintech) will be the biggest banking trend of 2019 by far.
In years prior, banks were extremely worried about Fintech disrupting and/or
uprooting their business. Now, the banks have realized that they either need to
either double-down on their internal technology or partner with financial technology companies to help deliver unique new products. At Zodaka, we’ve seen this trend play out positively as banks have been interested in building partnerships with us and seeing how we can work together to create new and unique business opportunities by leveraging each other's respective infrastructures, talents, and expertise.”
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