The six future trends in the financial sector,
In this post we look at the six trends that will
transform banking and insurance,
1 - Digital money
We're now seeing this move towards digitization,
where we can pay using digital wallets or we can
even pay by smile,
and for me this could mean that currencies real
currencies could disappear completely,
and we've seen this already 600 currencies have
disappeared in the last 30 years.
Currently the european central bank is working
on digitizing the euro,
the us is working on a digital dollar.
The digitization of money will mean that we will
also have more personal data,
that will be increasingly intertwined with our
money,
so information about us could be embedded in
money and transactions,
so for example payment systems could become
largely invisible and payments for goods and services could be taken
automatically based just on our identity.
2 - Financial Apps
We now have lots of digital wallets they are
typically up based services that allow us to pay for things,
apps and services are usually offered nowadays
by tech giants and digitally native startups companies like
Apple
Google
Samsung and
Paypal are offering these services,
they are powered by data and ai capabilities,
this new breed of fintech providers is
threatening the long-established monopoly that traditional banks and financial
services providers have had our over our money and our payments.
3 - Personalized And Intelligent Services
The data that this whole digitization of money
is giving us can be used to offer customers helpful insights about their spending
or even cross-sell other relevant financial products and services in the future,
so for example the uk metro bank has an
intelligent tool called insight,
which analyzes a customer spending patents and
makes predictions about whether a customer is likely to exceed their credit
limit,
before their next paycheck,
and we have apps like go henry which is a
prepaid card and finance app for 16 to 18 year olds,
this has now over 2 million members,
it's not only allowing them to make payments that
parents can watch,
but it's also providing education and we will
see more of those apps in the future.
4 - Blockchain And Web3
Financial services firms are already using it as
blockchain,
allows to streamline infrastructure while
cutting fraud and creating transparency speeding up core processors,
such as settling and clearing transactions and increasing
security,
Hsbc and wells fargo already use this technology
to settle foreign exchange trades,
mastercard and paypal allow payments on their networks
to be made using blockchain cryptocurrencies,
insurance mammoth axa has created its own
blockchain platform to automate the process of paying out to guests whose breakouts
are delayed,
but this trend also brings a huge threat to the
industry who have played this trusted middlemen function.
crypto and web 3 could completely sidetrack
traditional financial services players,
5 - Fairer Services With People At The Center
Lots of financial services companies have not
necessarily treated customers at the center,
companies like the royal bank of Scotland,
for example they have reimagined their data strategy
with people at the center,
where they're saying how can we use data to actually
provide a better service helping our customers to save money instead of
exploiting them,
We see fintech companies like oden for example taking
on some of the most toxic financial services like payday loans,
that have very much exploited people in the past.
6 - Green Operations And Investments
The environment is one of today's biggest
challenges,
banks are realizing and insurance companies are realizing
that their operations and where they invest has a real impact on climate change,
so we need to look at into our operations for
example making sure,
that our data centers are as green as they can
be and that's a good example of the wind cloud data center in Germany,
that is now actually carbon negative investments
are also really important that that financial services are starting to opt out
of funds that invest in fossil fuels,
this would become increasingly important for consumers in the future.
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