By Shashi Nirale, SVP and GM, EMEA at Servion Global Solutions
The BFSI industry has been in the center of disruptive changes in recent years, and they are poised for another transformative year in 2018; especially, on their customer engagement front. The industry will leave behind traditional banking methods and go on to embrace digital transformation. Successful banks will realign their strategy and invest in technology that can automate processes and drive more meaningful conversations with tech-savvy customers.
Here is a forecast of trends that are likely see to an early adoption in 2018 to strengthen customer experience.
Embracing Open Banking
Open banking, also known as Open Bank Data, will be the latest innovation of financial technology that banks will adopt. The customers are already rooting for it. This involves the usage of APIs to allow customers to switch and carry on transactions from one bank to another. This Banking-as-a-Service model (BaaS) will encourage banks to be transparent about their service offerings. It also allows customers to switch between accounts and avail a more personalized service at a considerably lesser cost. By factoring this innovation in their technology investment plans, banks will be in a position to increase customer satisfaction and drive maximum loyalty from them.
Expansion of Digital Economy
The ongoing advancement of Digital Economy will go full steam ahead this year. New digital initiatives will offer online financial services to the growing crowd of people using mobile apps. Banks will make a move to gradually replace their legacy systems, in addition to infrastructure changes required to be future-ready and millennial- friendly. The adoption of Bitcoin currencies will be widespread, and its demand will keep rising. The cryptocurrency payments are already the acceptable mode of payments in a few countries. Safe to say that with proper regulation, we will be moving towards a cashless society.
Simpler and Highly Secure Authentication
Biometric-based customer recognition created from fingerprint, retina, iris, voice, and face will rise as a preferred authentication two-way verification process. Currently, customers require multiple levels of a password to ensure their financial wealth and identity remains safe. This will slowly change in 2018. Banks will embrace advanced biometrics authentication methods to improve customer identity management along with mitigating the risk of security breach. However, by using multifactor biometric authentication the security levels can be stacked up higher making it extremely difficult for fraudsters to imitate true users.
Digital Personal Financial Management
2018, will be the year where customers will want to employ Digital Money Managers. It will simplify money management for the average Joes by offering spending insights, budgeting recommendations, tools and overall guidance for those who need to manage their wealth on the go. Banks can benefit by offering personalized digital finance management assistance, which in turn, will strengthen the customer-bank relationship and unveil new sales opportunities. To make it successful, banks need to be proactive and help their customers make smart financial decisions.
Banking on the Cloud
The cloud has evolved from being a hesitant ‘should we?’ to a confident ‘yes, we must’ technology for the BFSI industry. Going pro-cloud opens up a lot of benefits, including exponential cost reduction. Global accessibility, ease of deployment, scope to build new applications and test it out on-premise are some of the best of the rest that comes along with cloud adoption. In 2018, the cloud will become increasingly secure by committing to rigorous security monitoring. This has been a barrier that hindered the adoption of cloud in 2017. Next year, this will all set to change
Growing with Artificial Intelligence
It is clear that Artificial Intelligence (AI) is revolutionizing the BFSI sector for good. This will only continue to boom in 2018, as well. Chatbots and virtual assistants will lead the change for delivering outstanding customer experience through increased self-service and improved operational efficiencies. Machine learning algorithms will also be able to detect frauds and improve security of critical financial data.
Going Big with Big Data & IoT
Big Data has enabled the banks to embrace the Internet of Things (IoT) with open arms. It can open up cross-selling possibilities for financial services, including insurance covers. Big data can leverage customer insights to offer a more personalized and proactive experience. By investing in right IoT technology and integrating with Big Data, it allows ease of transactions in an interconnected world.
In 2017, some of these predictions were just buzzwords. In the coming year, they will be major investment areas for BFSI. They will increasingly go digital in all areas possible. 2018 will be challenging in converting these predictions into action. The success of this will largely depend on the speed of execution and the overall value they offer their customers. To stay on top of competition they need to be on the top tier of financial technology innovation.