There are several major trends that will shape the digital banking industry in 2022, according to Forrester. These include automation, Embedded Finance, and No-code/low-code platforms. These innovations will help banks achieve a comprehensive view of their customers’ finances. But while digital banking has become a primary focus for banks, branches will continue to play an important role, especially in the face of increased competition.
Embedded finance has the potential to redefine the way people use financial services. With the integration of financial tools into online and offline retail, consumers will be able to find tailored financial solutions when they need them. For example, they can purchase a car or subscribe to a subscription service that includes their financial needs.
The growing use of Embedded Finance requires a new approach and skill set for banks. As a result, they must adapt their core businesses and create white-label enabling platforms. Furthermore, they must create corresponding business processes for this new business model. The new approach requires a change in mindset and technology.
Embedded finance is also impacting retail banks. Its adoption is reducing their share of the retail banking revenue pool as more nonbanks are providing these services. By 2030, Embedded Finance is expected to represent 15% of the revenue pool in Europe. This means that banks will have to compete with nonbanks for their share of retail banking revenues.
Embedded finance is a type of digital banking that integrates payments with non-financial platforms. This type of service is especially advantageous for e-commerce companies as it speeds up transactions and boosts customer loyalty. Embedded payments eliminate the need for customers to enter their credit card information.
Embedded finance is already a growing industry in the Philippines and is expected to grow to US$1,821.1 million in 2022. This type of financing is a powerful driver of innovation in the banking industry. In fact, it has become an integral part of customer experience, loyalty, and rewards.
Automation of day-to-day tasks
Automating the day-to-day tasks of a bank will make operations more efficient and will enable customers to have on-demand access to answers to their questions. In addition to increasing productivity, banking automation will also reduce human error and improve anti-money laundering efforts. Additionally, it will cut the time needed for tasks to be completed and reduce costs.
Automating day-to-day tasks in a bank requires careful due diligence and an automation business case. Banks must be cautious not to automate inefficiencies or features that won’t benefit their customers. They must first determine which processes need to be automated and then use a lean approach to design and implement them. It is imperative to engage cross-functional teams and top management in the design process in order to achieve the best possible end-to-end solution.
Legacy banks often have a complex set of workflows, structures, and analog systems. By automating these processes, banks can cut out inefficiencies and optimize their systems for future technology. Because banking processes touch multiple lines of business, automation must integrate business processes, tools, and systems to achieve maximum efficiency.
Automating day-to-day tasks in a bank will allow employees to focus on more important activities. For example, automation can reduce the time required to validate customer information in two systems. By implementing bots for these tasks, banks can cut down on their processing costs by up to 30%. The automation of these processes will also free up employees to focus on tasks that are important to customers.
With increasing competition in the banking industry, banks need to continue to innovate in order to remain competitive. BPA, or business process automation, helps automate manual tasks and repurpose administrative time and costs toward more high-value work. In addition, process automation can help banks achieve their goal of creating a more efficient, responsive customer experience.
Low-code and no-code platforms are becoming more popular in the digital banking sector, as they can help financial institutions improve their customer experience. Traditional software development is expensive, and developer resources are increasingly scarce as enterprises make the move toward digitalization. Additionally, traditional software developments can take months or years to complete and deploy. In contrast, low-code platforms allow banks to get to market faster and less expensively.
With no-code/low-code platforms, financial institutions can automate and streamline key processes and procedures. For example, they can use the technology to convert spreadsheets into data streams and optimize documentation and quality assurance processes. They can also use the same platform to create a real-time database to streamline the credit appraisal process. This could reduce the time required to complete the process from several hours to just a few minutes. In addition, the platform can help improve data filtering.
With the development of low-code platforms, banks can leverage their existing IT infrastructure and avoid hiring additional developers. By 2025, 70% of large companies will adopt guidelines for no-code development, and more than half of these companies will have at least four low-code platforms on their portfolio. These technologies can accelerate the development process for digital banking, but they also pose a number of new challenges for developers.
While low-code platforms are not perfect, they can dramatically speed up software development and reduce the number of staff required to complete tasks. The rapid development process can also deliver fast onboarding experiences for customers. In addition to reducing IT backlogs, low-code platforms can cut the cost of traditional application development by as much as 80%.
Self-learning computer programs
The use of self-learning computer programs in digital banking is becoming more common in financial institutions. This technology allows banks to streamline the process of providing credit to customers and reducing staff workload. While some financial institutions have been slow to adopt this technology, others have already begun to see a significant improvement in their performance.
The human-centric design philosophy is an essential element in designing a user-friendly digital banking interface. It emphasizes the importance of recognizing the mental models of your target audience and matching them with the features of your banking interface. People can be confused about their finances and a human-centric approach will help them understand the process better.
Human psychology dictates that the design of your banking interface should evoke similar feelings in your users. The use of appropriate accents, symmetry, and hierarchy in your interface can improve your user’s experience and help them focus on the things that matter. A human-centric interface can also help you make better financial decisions.
In the human-centric design of your digital banking interface, you focus on the user’s motivation and ability rather than on technology. By focusing on the user’s ability and motivation, you can ensure that a user will be more likely to perform a certain behavior. This helps banks improve customer service and ensure that their clients’ banking experience is a positive one.
The human-centric design process also involves talking to the people who will be using the design. This feedback is crucial to understand the needs of the people who should use your product. This process allows UX designers to flip their mentality and think like a user. A human-centric interface will allow your users to perform more tasks without difficulty.
The fintech industry is at the forefront of humanizing computers and software. This change will help financial institutions improve their productivity and return more capital to shareholders. Furthermore, it will enable them to boost revenues by providing better products and services.