The financial industry’s digital transformation is a hot topic right now. Even before the epidemic, many financial institutions were searching for ways of improving their clients’ digital experiences and automate internal operations by adopting digital transformation solutions.
Furthermore, because companies must conduct as much of their business digitally as possible, the COVID-19 epidemic has expedited digital transformation in numerous industries, including the financial industry.
This is required to reduce face-to-face interactions for personal safety and to fulfil business objectives while adhering to all of the lockdowns and other limitations that have been imposed on and off over the past year.
But, not all changes are caused by the pandemic. There are also new societal expectations for things like sustainable banking options, which are influencing financial industry reforms.
So, as 2022 approaches, we thought we’d take a look back at some of the financial industry’s changes and trends from 2021 that will likely persist in 2022 and beyond.
The Financial Industry’s Digital Transformation Trends to Watch in 2022
Fewer brick-and-mortar bank branches
The reduction in the number of physical bank branches is one of the most important immediate consequences of the present digital transformation in financial services (and other financial service company offices).
There is just less need for brick-and-mortar branches to serve personal and business finance needs as financial institutions move more of their business online and customers adapt faster to using online banking services.
Staffing and operating physical branches is costly. Banks and other financial service organisations can improve net revenue if they can operate mostly online and over the phone.
Not only that, but by allowing customers to manage their finances without having to visit a physical branch, financial institutions may increase sales and improve customer retention.
Rise in self-service financial services
Self-service financial services are on the rise in conjunction with the decline of in-person financial services.
Chatbots and machine learning are reducing the need for employees to be present to answer basic questions by phone, email, and in person.
Customers can instead ask questions about their financial products, make transactions, or modify their accounts by calling and speaking with an automated voice or chatting with a bot online.
In fact, when it comes to financial items like as insurance, bots and machine learning algorithms may manage the entire insurance sales and customisation process, that otherwise would have been done by insurance brokers and/or salespeople.
This not only improves financial institutions’ digital user experiences, but it also streamlines workflows and lowers operating costs. It also implies that businesses can provide quality service 24 hours a day, seven days a week, rather than only from 9 a.m. to 5 p.m.
Higher demand for sustainable banking
Customers are no longer limited to choosing a bank or an insurance company in their local area, due to the increased availability of various financial services online.
This indicates that clients have more freedom to choose who they bank with or buy financial products from based on shared values like environmental stewardship.
A growing number of financial institutions are responding to the increased demand for sustainable finance by refusing to invest in environmentally damaging projects such as fossil fuel extraction.
Sustainable banking, on the other hand, invest their customers’ cash in weather patterns projects like renewable energy.
While many large, traditional banks will certainly continue to engage in big oil, a growing number of smaller financial institutions, such as credit unions and online banks, are leading the charge in offering environmentally friendly financial services.
Increase in low-code and no-code development
Low-code and no-code development platforms enable companies to stretch their existing IT resources, save IT expenses, and quickly deliver web-based apps and systems to their clients.
As the names imply, these platforms use drag-and-drop design capabilities to allow someone with little to no experience with traditional coding to create an app or application.
This implies that companies don’t have to hire or hire developers to create the tools they need and get them up and running rapidly.
Companies that already employ developers can create apps in half the time it takes them to do so by laying the foundations with low or no code, then improving on it with more code to add features and functionality.
Financial institutions are using this technology to digitise inefficient processes and improve their clients’ digital experiences, as well as to improve internal activities and boost employee and business productivity.
The financial industry is embracing digital change at a faster rate than ever before, and this trend will continue in 2022 and even beyond.
This is beneficial to both financial institutions, such as banks and insurance firms, and also their users.
Keep an eye out for some of the financial industry’s digital transformation trends and think about how they can help you!