Open Banking and APIs
Gaining significant momentum across the globe – businesses, including banks, are getting better at adopting an “open” model and honing it into the industry. Thanks to increasing financial data transparency, third party and partner APIs are allowing financial service companies and banks to take innovative ideas to market quickly and cheaply.
It is still in its infancy, in need of strict regulations and security measures, but it’s looking very positive. Businesses are monetising data and building new revenue streams. Those that don’t think strategically and establish themselves within open banking will run the risk of being disintermediated from their customers.
Maturing blockchain technology
We’ve seen great progress this year on blockchain technology. While perhaps not as quickly as we had anticipated at the beginning of 2017, we’re now seeing some very successful pilots being deployed across the financial services industry. I expect lots more will come in the next 6-9 months as the maturity of blockchain as both a solution and opportunity grows.
VR becoming more of a reality
It is clear that technology is affecting financial services in a multitude of ways. In the next year, we’ll see AI and VR becoming real opportunities to engage customers with a fully immersive and interactive experience, such as providing customers with virtual banks. We’re already seeing less bank branches opening and this will continue to decline as VR/AI come to play.
Mobile banking will continue to lead in the next year. Only 18 months ago, few-to-no banking transactions made were on mobile, by 2020 we predict this figure will be around 90%.
More noise from the fintechs
Traditionally, market entrants found it difficult to break crack the financial services industry. Now, conversations around fintechs have vastly matured over the last year. Typically honing in on one specific service, they are able to refine and perfect it. Consumers are now realizing what is on offer and customer service expectations are increasing. New entrants like Monzo have shown consumers what good banking services could like – the business is legacy free and innovatively handles user experience through technologies such as chatbots and biometric authentication. Be prepared to see the financial services industry become far more technologically competitive over the next twelve months. Competition will be particularly fierce with fintechs creating new marketplaces through their unique service offerings.