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Digital Banking Trends That Are Changing Banking Forever

With the rise of smartphones, online access and mobile payment apps, digital banking has become more popular than ever before. Unfortunately, not everyone is aware that there are several trends that are changing banking forever. Read on to learn about the latest digital banking trends that will reshape the financial services industry in 2022 and beyond.


Virtual Banking Services

Virtual banking services will become increasingly popular as customers seek to balance the convenience of digital banking with the security of their financial information. Virtual banking services allow customers to access financial information, like their account balances and transaction history, on their computer, smartphone or tablet. They also allow customers to deposit checks and make payments through their computer or mobile device. As more consumers rely on digital banking, they are increasingly demanding tools that make the experience more convenient. They want tools that help them manage their finances, like budgeting and savings tools, and tools that make money management easier, like payment receipts and reminders. Additionally, some customers want tools that help them connect with other people, like social networking and online banking for business.


New Customer Acquisition Strategies

Customer acquisition strategies are changing as more financial institutions focus on creating new customer relationships. Given the cost and effort involved in acquiring new customers, the majority of financial institutions focus on retaining existing customers. However, according to a survey by the New York City-based digital strategy firm, Sextant Research, more than half of all respondents indicated that acquiring new customers ranked in the top three priorities for digital strategy. With the cost of digital advertising continuing to increase, more financial institutions are turning to customer referral programs as a way to acquire new customers. In these programs, customers earn rewards, such as cash back, gifts or merchandise, when they bring in new customers. Finally, with the growth of newer financial technologies, like mobile apps and virtual banking services, financial institutions can reach new customers in new ways. For example, a financial institution may use virtual banking to allow someone who knows someone else who is interested in banking to introduce that person to the institution.


Innovative Digital Payments Tools

The growth of digital payments has been phenomenal. While most financial institutions are still focused on the legacy payment processing systems, the rise of innovative digital payment tools is changing the game. To cater to the growing demand for cost-effective digital payment solutions, financial institutions are partnering with payment processing companies to enable their customers to use their existing mobile apps to make payments. By doing so, customers can use the apps they use for their banking, including check deposit, bill payment, money transfer and credit card payments, without making additional changes. In addition, some financial institutions are partnering with smartphone platforms to deliver a native payment experience. By partnering with these platforms, financial institutions can offer a payment option that is easy to find and use.


Blockchain Technology

Although the hype around blockchain technology has died down a bit, it is still a major trend that will reshape the financial services industry. In the future, blockchain technology will play a major role in banking. For now, however, the most significant impact of blockchain technology is likely to be on digital payments. Banking will use the technology to create new, blockchain-based digital payment solutions. Banks are exploring a range of blockchain-based solutions for digital payments, including digital wallets and a blockchain-based remittance network. Financial institutions are also exploring how blockchain technology can enable new business models by providing new, cost-effective payment options. For example, a major global bank is testing a blockchain platform that allows investors to trade shares in profitable companies.


Automated Banking Procedures

Automation is already reshaping the banking industry. For example, automated software can determine which financial products are best suited to customers based on their financial needs, like retirement or mortgage needs. Automation is also helping banks make more informed decisions. For example, automated risk models help banks make sound decisions, such as whether to approve a loan or not. With the rise of artificial intelligence (AI), automated decision-making has become possible. AI can help banks make more informed decisions, like identifying fraudulent transactions, by analyzing large amounts of data in real time. AI can also help banks process large numbers of transactions faster by identifying patterns among the transactions. Automation will also play an important role in marketing. For example, financial institutions want to promote their products, such as credit cards and loans, through digital channels. With the help of technology, banks will be able to craft relevant messages and ensure that these messages reach the right customers.


AI-driven Services

AI will play an important role in the services provided by banks in the future. For example, AI can help banks detect fraudulent transactions by analyzing large amounts of data in real time. AI can also help banks process large numbers of transactions by identifying patterns among the transactions. As the volume of transactions continues to increase, AI will help banks process these transactions in a more timely manner. In addition, AI can help banks detect customer needs, such as their desire to save more money, by analyzing customer behavior.


Bottom Line

New customer acquisition strategies, innovative digital payments tools and automated banking procedures are all trends that will reshape the banking industry in the future. Automation in banking will play an important role, particularly with the rise of AI. Finally, the impact of these trends will be significant as banks use AI to help customers manage their finances and make better decisions.

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