The banking and finance sectors are quickly moving towards complete digitalisation, particularly with the COVID-19 pandemic forcing even those on the sidelines into a bold digital future. But as the old saying goes, “you ain’t seen nothing yet.” So, as we press on into 2021, what trends are waiting in the wings this year to change the way we bank this year?
More businesses have been turning to fintechs for faster and more innovative solutions. These are the companies who have the flexibility and the freedom to take those risks and make the kind of bold decisions that can but a business on the map. According to Chirag Shah, CEO at Nucleus Commercial Finance: “SMEs are now turning to alternative and fintech lenders as the first point of call due to our innovative solutions and ability to provide funds faster than high street banks.”
Digital-only becomes mainstream
Every bank on the planet will now have its own mobile banking app. That’s a given. But what about if it decided to throw away the brick-and-mortar edifice entirely and focus entirely on that app? That’s what the new wave of digital-only banks represent. Also known as “neobanks,” these app-based banks are able to offer things their conventional counterparts never could because of the sheer lack for overheads associated with running a bank with no physical limits (and no rent to pay).
Open banking continues to take hold
The second payment services directives (PSD2) that were passed in 2018 mean that banks are allowed to shire their data in a standardised manner. So, if you have bank accounts with Halifax and Nationwide, for example, open banking allows you to manage those accounts from one app. This is make possible through there use of open APIS (application program interfaces) that share information securely and can be used to fashion e-wallets that bring all of a customer’s accounts together.
AI stops being scary
Artificial intelligence might be seen by some as a threat to our traditional way of life but right now, what it really means is allowing businesses to be more efficient with their resources. AI takes all of the busy-work out of the hands of the humans, allowing them more time to work on what really matters. As banks and fintech companies begin to understand the power of these technologies, it will have implications far beyond chatbots and ‘virtual assistants’.
We’ve all heard about the blockchain but what is it really? Is it simply the system that allows cryptocurrency to function? It’s so much more than that. What it really means is decentralised systems that work because of thousands of computers working together rather than one centralised system. This is significantly more secure and potentially much faster and more powerful too. Indeed, as far as finance and blockchain are concerned, the sky is the limit.