The year 2022 was very turbulent in many ways. From the economic downturn to the crypto crash to the rise of digital-only banking, the financial industry has seen many changes and transformations.
So what does 2023 have in store for the financial and banking industry, and what to expect from the ever-changing tech trends?
The educated predictions suggest that in 2023 the financial industry is expected to embrace innovation and new technology, which will positively impact client experience and boost revenue.
So here are the top 5 tech trends that are about to shake up the entire financial sector:
1. AI technology
In 2023, the banking industry is projected to continue embracing AI-driven technological solutions, since it has proven to lower bank operating costs.
Artificial intelligence (AI) technologies help automate a number of complex manual processes. In the financial sector, it helps to drive enhanced client service and major infrastructure decisions. Moreover, it enables better recognition of such malicious activities as fraud, money laundering, and cybercrime.
What’s more, artificial intelligence can provide continuous assistance for client relationship managers that will help manage client portfolios and assets with more precision. This will all lead to better customer experience and an increase in customer satisfaction.
Based on AI algorithms, financial advisors and relationship managers will spot upselling and cross-selling opportunities, will be able to simplify issuing loans, and will interact with clients more efficiently.
The Deloitte survey has found that adopting AI technologies in the financial sector will become indispensable in the next two years.
2. Focus on Big Data and Analytics
With big data at their disposal, banks will be able to track client behaviors and build more reliable predictive analytics. This will help provide more personalized client services and improve client relationships while increasing revenue figures.
Predictive and behavior analytics are expected to become essential for more accurate market segmentation and finding new cross-selling and upselling opportunities among existing clients.
This will help banks develop better and more targeted products that will cover a larger range of client needs and requirements. All this knowledge will lead to an increase in client satisfaction and support client acquisition efforts.
In order to collect Big Data and create custom analytics, banks will need to employ fintech solutions that will help them track client activity, recognize keywords related to products or services during client conversations, and predict their next steps.
3. SaaS platforms
One of the most prominent trends in finance for 2023 is SaaS products.
SaaS solutions have been catering to every business’s needs for a while now and the SaaS market has grown to unseen sizes and proportions in recent years. With the current economic downturn, software companies need to focus on bigger fish, and the financial industry is one of their most promising clients.
Software-as-a-service firms save businesses the trouble of complicated software and hardware management, including data storage and installation. This helps businesses save time and resources, but also has the added benefit of various features and functionalities, tailored specifically for covering essential business needs.
These platforms can help with client management, and better product delivery, which will result in increased customer satisfaction.
One example of a SaaS company is Unique. Unique provides bankers and client advisors with AI-powered software that records, transcribes, and summarises client conversations and later sends essential conversational data straight to the client management system. This way, client advisors and relationship managers spend less time on manual tasks, and more time building relationships with clients.
Unique has proven to save more than 2h 20m of manual work per week per client advisor. On top of that, Unique’s real-time sidebar features an intelligent agenda that helps relationship managers stay consistent during consultations and mention all the relevant information to the client.
Moreover, based on client conversations and specific keywords, the Unique’s Spider Diagram can reveal what products or services might be interesting for a client in the future, which helps find new cross-selling and upselling opportunities faster.
4. Embedded Finance.
Another trend in banking 2023 is embedded finance. For those who are not familiar with the term, embedded finance is the placing of a financial product in a non-financial platform, customer experience, or journey.
The possibilities are infinite: digital wallets, spend management software, client loyalty apps, etc.
The embedded finance universe has grown exponentially over the years, and the current ecosystem is massive. Studies suggest that the embedded payment industry will grow by 40.4% annually.
With embedded finance solutions, the client can enjoy complete offerings throughout their customer journey, which leads to increased client satisfaction and a boost in revenue. Additionally, it greatly simplifies the client experience with its holistic approach.
BNPL (buy now, pay later) is one of the fastest-growing sectors in embedded finance. It allows consumers to split the purchase into several instalments, or simply pay for it after the delivery.
It comes as no surprise that every employee in the financial sector falls under heavy regulations. Thankfully, there are plenty of tech solutions designed to cope with compliance issues and other financial regulations.
The RegTech (Regulatory Technology) sector has seen sudden growth over the years and has become more and more appealing for financial institutions. It was conceived as a means through which bankers could streamline almost every detail of the complicated compliance process. RegTech uses machine learning, cloud technology, and big data analytics to be able to identify and foresee compliance risks and eliminate them efficiently.
It’s projected that the RegTech industry will grow 200% between the years 2022 and 2026.
The future of finance lies in technological innovation. Even traditional and private banks are projected to embrace new technology and implement third-party services to supercharge client satisfaction in the next couple of years.
The future of banking is centered around clients and building deeper, more meaningful connections with them. Therefore, adapting to new realities is so crucial for businesses that want to supersede their competition.