The financial service industry trends are changing with contactless payments being a top
trend moving forward. The contactless payments market is growing and is expected to
reach £14 billion by 2025.
In 2021, the financial services industry was defined by an acceleration in digital and
digitization engagements, due to the COVID-19 pandemic. Exchanges were forced to
close down their trading floors and move to remote trading, while mobile banking
transactions reached an all time high. Call centre staff were moved to home offices where
they could continue to provide telephonic services to their financial clients.
The financial industry was able to manage the digital change and continue operations.
Financial institutions are now strategic about their technical operations and identifying
tools that were previously relied on that work. There are some trends in the forecast of the
financial industry that will roadmap the future.
If you are interested please read our finance budget vs forecast blog which has more information about the forecast in the finance industry.
Updating Core Systems
One of the forecasts for the financial industry is the updating and modernisation of core
systems. The coronavirus pandemic put the financial infrastructure to the ultimate test,
challenging any architecture they relied on. Many of the core systems were considered
outdated and needed urgent changes, due to the demand posed on them. Outdated
systems struggled with the constant and fast demand.
Loan processing, manual reviews and approvals all struggled under the strain with the
demand for credit by small to medium sized businesses on the rise. Lenders faced
challenges in updating their underwriting and risk management systems in order to meet
the growing demand. This made it hard to provide the fast response needed by these
businesses at the time.
One of the main focuses in 2022 by the financial services industry is to modernised, scale,
secure and find resilient technological infrastructures.
Digital Engagement Expected to Grow
Cash in society was used extensively prior to 2020, since then the demand for contactless
payments has risen. A large majority of businesses are changing to contactless payments
and this trend is expected to continue well into the future. Seventy four percent of
consumers throughout the world are using contactless payments.
More than forty percent of retail banking clients are already relying on mobile applications
to carry out business. New financial applications and upgraded applications are expected
to influx the market in the coming years to match consumer need. The forecast in the
financial industry is that financial service providers will continue to invest in tools, artificial
intelligence capabilities and digital platforms to meet the need of their clients.
Another business forecast in the financial industry is how insurers will be personalising their services
based on their customers needs. Due to the pandemic, more people worked from home
and reduced how much their drove their vehicles, while others increased their health
insurances. Many of the insurance companies have taken steps to decrease their
premiums and adjust their insurance contracts to meet their consumers needs. The most
useful products have been tailored to meet the needs of the customer.
This level of personalisation for customers has required extensive investment in
technological infrastructures to provide real time insights.
Changes in Financial Trading
As trading moved off the trading floors, many firms were able to position themselves as
chosen traders with workers working from home. Exchanges and trading floors globally
were faced with unexpected obstacles, which required resilience plans in place. Moving
forward we can expect to see more financial activities taking place via the internet using
technologies with trusted platforms, many of which are relying on cloud computing, which
enables them to manage demand with excellent security.
The financial industry can continue to experience ongoing innovation moving forward,
which is a complete game changes to financial service providers. The financial services
industry transformed quickly during the pandemic to assist customers and this culture is
expected to continue in the future. Vendors, regulators and supervisors are working
together on safer, inclusive, equitable and cheaper financial markets.
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