During the pandemic, prolonged lockdowns encouraged the use of digital banking trends. Consumers quickly adopted digital payments via smartphone apps, which they had previously been hesitant to use.
Banks’ focus on digitization and user-centricity has shifted in the previous two years. The pandemic has set the bar exceptionally high for digital banking trends. For the post-pandemic age, a new generation of clients is emerging. Since the pandemic began, 75% of buyers have tested other brands, according to McKinsey’s analysis. 60% of these people are predicted to incorporate new brands and stores into their lives and habits following the pandemic.
Consumers today expect brands to show empathy, loyalty, and emotional connection. The majority of consumers believe it is past time for corporations to rethink their operations and contributions to society. As a result, banks will need to broaden their perspectives and add an emotional component to the digital experience.
The Ten Digital Banking Trends that we may see in 2022 are listed below.
Banking Trend 1: Increasing digitisation in all service verticals
The foremost banking trend identifies that traditional banks provide a variety of financial services, but they are woefully unprepared for digitization. Digitalization is one of the most critical needs for the banking and finance industry following the lockdown. Although most banks around the world were gradually implementing digital processes, the pandemic showed their inability to serve customers in times of need.
The KYC procedure or applying for a loan at a bank office puts the consumer’s health at risk. Despite the fact that remote service was quite practical, banks did not use technology to effectively provide it to customers. Fintech companies stepped in to fill the void. Banks could learn much from them. By growing their digital services, they can provide better user experiences.
Banking Trend 2: Creating a customer-focused culture
The second amongst banking trends states that digital-first companies can quickly adjust to shifting client demands. They can replace outdated procedures, upgrade to current technologies, and customize goods to meet the needs of clients. Business culture has evolved into a critical component of success in today’s world. Even the most well-planned digital transformation might fail horribly if the organization lacks a customer-centric perspective. For example, 79% of customers want to engage with brands that understand and care about them, and 89% want to engage with just those firms that go above and beyond.
It means that building a digital journey that puts the client first is essential. It is, fortunately, simple to execute in digital-first businesses. All that is required is careful planning. The entire organization should be involved in generating and implementing ideas that solve consumers’ problems. Even though it may be difficult for older institutions to adjust to these changes overnight, customer-centricity should be a top focus while undertaking digital transformation.
Banking Trend 3: Filling in the blanks
The third banking trend emphasises that the banking system, whether traditional or new, has the potential to create multiple gaps between what the client wants and what the brand can deliver. Buyers are likely to abandon a brand if the difference is significant. The digitization of banking has made it easier for customers to change banks and choose a brand that suits their financial needs. Financial institutions must close these disparities by 2022 if they are to succeed.
At several levels, there is a disconnect between customer expectations and financial institution services, such as:
- When senior management is not customer-focused, a culture gap develops. Employees are unable to provide the best possible service to clients as a result of this predicament.
- When an organization fails to gather feedback or incorporate it into its business operations, it creates a feedback gap.
- When products and services are of poor quality, there is a design gap. To close the design gap, thorough customer-centric planning is required. The execution gap is the inability to create an acceptable user experience.
- There’s also the value gap, which occurs when the design of products and services fails to match the expectations of customers.
- A chasm of overpromising just adds to the disappointment.
- Finally, there is the emotional gap, which occurs when a customer believes that the company is uninterested in their issues.
Addressing these gaps is becoming increasingly important when designing digital products. This is something that certain banks are aware of. As a result, many traditional banks are willing to partner with fintech firms to attract a younger generation of consumers while continuing to provide legacy services to the digitally challenged.
Banking Trend 4: Establishing an emotional bond
The two fundamental currencies of a brand today are purpose and empathy. This is one of the most important banking trends.
People are now experiencing pandemic fatigue as a result of working from home in isolation, which is a second-order impact. People are feeling even more isolated as all processes become computerized. As a result, establishing an emotional bond with the customer is becoming increasingly important.
To maintain its notoriety, the banking industry often keeps such emotional connections away. Fintech companies will create customized experiences for clients based on emotional connections in 2021. It’s no longer just about employing “first name” in fintech marketing strategies; it’s about personalizing the entire digital experience.
When it comes to digital experiences, banking apps still fall short of the seamless experiences provided by digital platforms like Facebook or YouTube. They also cater to the needs of the users to the greatest extent possible. These platforms can be used as inspiration for banking apps that want to create an emotional connection with their consumers. And this is no longer a secret. N26 and Mint are two examples of apps that take personalization to the next level; Abe AI’s integrated financial services with Google Home make banking more convenient.
Banking Trend 5: Measuring the current era
The latest banking trends suggest that with customer experience as the major focus, most financial institutions will evaluate their success using experience-driven measures. The key performance indicators for digital banking products will determine how effectively organizations engage with customers. Not only will the metrics be based on operational efficiency, but also on how comfortable clients are with them. User feedback, such as comments, ratings, and suggestions, will be taken into consideration in the new statistics.
Financial institutions can assess app store ratings, net promoter scores, customer lifetime value, reasons why most customers contact support, app retention and switch rates, active customer volume, and other indications.
Banking Trend 6: The shift to EQ and automation
After the pandemic, the banking trends suggest emotional intelligence has become even more important. While banks and financial institutions have traditionally focused on their IQ, EQ is slowly becoming a more important factor. Fintech companies are becoming less robotic thanks to new technology like artificial intelligence.
Banking Trend 7: Creating a dependable ecology
Current digital financial systems include inconsistencies. Apps and websites have a variety of graphic elements that appear and behave in different ways. User interfaces change between the internet banking website, apps, and ATMs. For example, the State Bank of India has several apps for investment, payments, and card management. They’ve even created an app that brings all of these elements together. Each one has its user interface and design system. This user experience is vastly different from that offered by the website and ATMs.
Across all channels, customers want a consistent digital banking experience. Having a unified experience will make it easier for a customer to switch between several banking platforms.
Banking Trend 8: Providing contextual solutions
Banking trends suggest that banks can give a more contextual experience to their consumers using techniques like big data analytics. AI can be used to track spending patterns and make recommendations. Trim is a wonderful example of this. Olivia.ai is an app that encourages people to modify their negative spending habits. Contextual experiences in apps can alert users to take action when it’s needed. They can track a user’s financial health and predict how their present actions will affect their financial future.
Banking Trend 9: Collaborations with financial companies are becoming more common
To integrate digital processes into their businesses, banks are increasingly cooperating with fintech companies. Traditional banks are frequently too large to be digitized in a single day. Fragmentation has also resulted from phased digitisation. As a result, banks can collaborate with fintech companies and startups to provide their consumers with innovation and ease. For example, Commerzbank teamed up with IDnow to assist consumers to authenticate their identities via video conversations. For its e-Payment system, FidorBank has teamed with CurrencyCloud.
Banking Trend 10: Banking that is both sustainable and inclusive
Customers nowadays have higher expectations of their favourite brands. People desire to be connected with organizations that care about society and the environment. People are also quick to donate to a good cause. Banks can assist their customers in making a positive contribution to the environment. It will allow them to stand out in a crowded market.
The outbreak served as a wake-up call for all businesses, reminding them of their mission and what they could offer their clients. Customers want banks and financial institutions to be on the lookout for them, understand their needs, and actively help them. The transition to digital, which began well before the pandemic, has accelerated significantly. This situation has also provided financial institutions with the opportunity to rethink their mission, update their mission statement, and improve the digital banking experience by making it more personal, empathic, and understanding.