The current decade from 2020 will be a watershed decade – as technological advancements continue to transform people’s lives. The last couple of years has been like no other, while the entire world drastically transformed to meet its needs for survival, fueled by industries eager to adopt the latest technologies as quickly as possible. Digitisation and the future appear to be synonymous, since we will eventually see all industries adopting the latest technology to stay connected with their customers in the new normal.
With banks like JP Morgan becoming among the first to enter the metaverse, we may see an increase in the number of banks attempting to target customers with cutting edge technology-related offers. The drive to provide clients with unique and autonomous experiences will possibly intensify in the banking industry in the years to come. Here is a quick synopsis of the banking sector’s future as envisioned for 2030.
With banking evolution comes radical digitisation
It’s feasible that the banking sector may change more in the current decade than it has in the previous 100 years. A report published by Accenture states that by rethinking their business models and embracing the innovative strategies of digital-only banking, traditional banks could boost revenues by nearly 4% annually, resulting in more than half a trillion dollars in additional revenues in 2025. If the methods in which our banks handle money mature and change, it’s feasible that people’s lives may alter dramatically as well. Here are the four major changes we’ll get to see in the banking industry in the coming years:
1. The future of data
Consumer Data Rights will be embraced by all sectors as more and more everyday objects are connected to the internet. Data will become more significant, and we will be compelled to expose a 360-degree portrait of our lives at a certain point. There’s no doubt that the desire for more security and transparency will grow, and it’s possible that the evolution of related products and services will give customers more utility and value.
2. Adaptive business models
With the broad availability of neobanks and niche banking platforms, it’s feasible that the banking sector may see a wave of new entrants in the future. Traditional banks’ business models, particularly their core offerings, are likely to be extended. Other industries are rapidly using fintech products, so expect a surge in industry crossover offerings. A sort of ‘platformication’ can be expected from banking products and services as customers prefer more personalization and customization of the offerings.
3. Increased regulation
Major government and regulatory entities will need to devise new ways to manage risks, control activities, and protect consumers amidst the rise of cross-industry participation. With future-proof regulations, one can expect more streamlined digital interactions. By 2030, governance is projected to shift away from a product-centric approach and instead focus on monitoring institutional activities and outcomes. Financial regulators will evolve to create new institutions to monitor the companies they regulate, determining whether or not companies and banking institutions are safe.
- Extreme technology adoption
The list of technologies is unending, and in the current decade, everything including AI, biometrics, blockchain, cloud computing, metaverse applications, and quantum computing, are just a few to name. A 2020 Forbes article predicted that by 2030, banks will be invisible which basically means that, “Leading banks will use technology and far deeper customer insight to insert financial services at the customer’s moment of need, often at the expense of brand visibility.” Another report by IDC says that over 80% of corporate banks in India will run their trade finance and treasury businesses on the cloud by 2024.
As customers increasingly prefer to choose products and services with more personalization and autonomy, banking will see technologies that will move from being merely emerging and tap into more transformative offerings. Data will be used to create smooth, connected experiences that go beyond banking to fulfil the changing demands of customers.
Written by
Alok Bansal, MD Visionet Systems India and Global Head of BFSI Business
