In 2017 the banking industry will inevitably continue on the path of digital transformation it has been – and accelerated – on over the past few years.
Below, we outline the top banking and fintech trends for 2017 and how the world’s leading banks are addressing them.
Competition will drive transformation
Fintech companies are competing with banks on a number of levels including peer-to-peer (P2P) payments, lending, saving, and investing.
Banks should be worried 33 per cent of millennials believe they won’t need a bank in the next five years. Almost 75 per cent of millennials are more interested in financial offerings from Google and Amazon than from traditional banks.
For banks to continue to compete they’ll need to make sure they are providing better services and customer experiences than their bank competitors - but also upstart fintechs.
Continued shift from to digital channels
Millennials are driving the overall shift from in-branch banking to digital channels and we predict this trend will continue, if not accelerate, in 2017.
The Financial Brand recently found banks are spending 22 per cent of their budgets on optimising their digital channels, the second-most important investment priority behind their core banking systems.
If banks aren’t devoting a large percentage of their 2017 budget to transforming digital onboarding experiences, it’s time to reassess that approach.
Open banking will gain acceptance
Historically, banks have been hesitant to integrate their systems with third-party software and platforms due to strict consumer privacy laws and harsh penalties for breaches.
However, 69 per cent of banks now see open banking as more of an opportunity than a threat, up from 50 percent in 2016.
Customer service will be vital
The proliferation of both traditional banks and now specialised fintech companies means consumers have more choice for financial products and services than ever before.
To stand out amongst a crowded market, banks will be forced to invest in, and compete with, their customer experiences.
Gartner found 89 per cent of organisations now compete primarily on customer experience, which means banks who are looking to gain market share may be best served by focusing on service rather than products.
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The internet of things (IoT)
Most consumers aren’t interested in opening a checking account from their refrigerator (yet), but with the proliferation of the IoT banks need to be able to provide account opening abilities anywhere and with any internet-connected device.
Expect to see this trend continue as IoT companies focus on improving user experiences on a multitude of devices.
If a bank isn’t focused on building omnichannel digital acquisition processes, it is already behind its competitors.
Derek Corcoran is the Chief Experience Officer at Avoka. This story originally appeared on avoka.com
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.