Technology has continually shaped the world over the years, and with the way things are going, technological advancements will continue to progress. Different industries have certainly benefited from what technology has to offer and in turn, operations have become much smoother processes. Of course, there’s always that one movement that can be a little tricky to handle, and one particular industry that is a great example of this is none other than the Financial Services industry.
If there’s one thing that has taken a hit since the pandemic started, it’s the economy. A McKinsey report from July of last year showed that while the pandemic may seem like a fact of life for the next few years, reopening the economy is not something that’s entirely impossible.
Fast forward to 2021, and most countries have indeed begun to re-establish a stable economic flow. Businesses have started to reopen and a lot of industries have adapted to a more remote work setting to maintain operations. But with all the positive things that’s happened for other industries, what does this mean for the Financial Service sector?
Luckily, Professor 3P is here to talk to you a little bit about how the financial services industry is doing! He’ll also talk about what trends are coming out on top and the opportunities we can have in the industry!
The Current State of Financial Services
In a blog post released by HSBC, banking, as we know it, will definitely undergo some changes as the pandemic rages on. True enough, fast forward to 2021, those changes have indeed come to fruition.
For starters, the RFI group’s research showed that on a global scale, 71% of consumers are now using digital banking on a weekly basis. This especially coincides with the fact that since the pandemic has started, a vast majority of transactions are now being handled virtually, contributing to a steady rise in the use of digital banking.
All that being said, even though a majority of businesses have migrated to a remote work setting, brick and mortar banking is still here to stay. In an article from B2C, it shows that an adaptive relationship between digital and traditional banking may be observed in the years to come, as most innovations for financial services (particularly in financial technology) complement brick and mortar banking right down to a tee.
Sure, the road ahead for financial services can still be a bit tough nowadays. But, with certain trends up and about for the finance sector, we have lots to look forward to!
3 Trends in Financial Services to Watch Out for
It’s never too early, nor too late, to list down a few things that we’re thankful for, especially when it comes to finance and especially when these trends, whether little or grand, help with the progress of the industry. With these trends in mind though, we definitely have a few bright horizons here and there!
- Contactless Transactions
The first trend to look at is none other than digital cash! According to a Forbes article, around 74% of global consumers are more likely to prefer contactless transactions even after the pandemic in 2021, with the market size also expected to grow from $10.3 billion to $18 billion by the year 2025.
Mobile apps have also contributed to its growth, with 44% of retail banking customers choosing to rely on mobile apps to conduct business. Of course, as numerous mobile apps are downloaded for businesses to handle transactions, transaction volumes have skyrocketed, bringing contactless transactions to a steady rise to the top.
- Personal Insurances
Another aspect of financial security that shouldn’t be taken lightly is insurance, especially now that the world is facing its biggest crisis to date. Pretty much anything can happen, whether it be a horrible accident or disease, you want to make sure that you and your loved ones are financially secure!
That being said, the same Forbes article mentioned that nowadays, insurance options have become much more flexible to meet almost any condition. For instance, auto insurances are now more based on the miles driven, home insurances became more effective when certain products are integrated to connected homes, and health insurances have adjusted their premiums to also cover non-essentials surgeries and other procedures.
- More Partnerships for Banks
The COVID-19 pandemic has brought on great change, both good and bad. Just like anything having to do with change, it can also lead to untapped opportunities to be explored and flourished. For the financial services industry, this is something that’s very much apparent.
Technology has paved the way for partnerships to be made, and certain banks around the world have also gone through that road. For instance, banks like HSBC will be merging human and digital channels for a much more prompt approach to customer service. This will include integrating AI chatbots for customers to chat with on their mobile app.
In this day and age, any advancement that comes to form is something that we can make good use of for good business, and with financial services, these three trends are just as important as high numbers for each quarter!
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