By Matthijs Aler, CEO of Ohpen
A new era of opportunities and hyper-digitalisation took the fintech industry by storm in 2021 as a result of the pandemic. And it’s showing no sign of slowing.
Cloud banking has taken giant steps forward with industry-leading executives expressing their optimism and ambition for the move towards cloud-native financial services. This shift towards digitalisation has been accelerated by the pandemic, which saw banks’ workforces move to remote working across the financial landscape. As a result of this, many institutions have become aware of the benefits of transferring services onto the cloud, as well as its potential for improving operational efficiency and creating a customer-first experience. What’s more, the rapid growth of the fintech industry further challenged the status quo in the B2B and B2C worlds, offering a smoother and diversified range of payment options.
Now, with another chapter of remote working and prolonged pandemic lifestyle changes on the horizon, the forecast for business and customer circumstances looks both fluid and complicated. These highly specialised needs will require equally contemporary technological solutions to cater for each unique circumstance. It is here that partnerships across the fintech landscape will make their impact in 2022 by enabling customised financial services and products, as well as reducing their required time for market launch.
The Human vs Machine paradox
This evolving tech saga will enter yet a new chapter in 2022. For certain financial processes such as insurance and some investment propositions, robo-advisors and background automation are set to become more prominent across the board.
Across other complex products such as mortgages, robots are unlikely to replace humans any time soon. However, the hybrid balance is set to shift significantly. Across mortgage and loan origination and underwriting processes, robo-advisors will increasingly pull together the data across these functions at speed to arm customer facing advisors. This will certainly push human consultation further towards the end of processes, yet paradoxically get the customer to reach it much quicker, sparing them of dozens of online forms in the process.
Friendly, professional advice will forever remain the most vital link in the financial chain, yet this move from 50/50 robo-human to 75/25 will better leverage the power of human analysis, locking in consumer confidence from start to finish.
Predictive analytics to supersede linear business models
With the pandemic’s impact set to keep rippling through consumers’ personal finances next year, advanced predictive analytics will be a crucial part of credit and arrears management strategies. Working on both macro and micro levels, AI will continue to find patterns in complex data, and pick up trigger points across consumers’ financial behaviour – for example spotting credit problems before they escalate.
With algorithmic trust growing across business, financial advisors will look to AI to predict exactly which accounts and clients may need monthly interest and loan repayment support. In fact, this trend will continue well beyond 2022, as digitising the credit space becomes increasingly important. Data-driven tech will supersede traditional linear business models when it comes to supporting today’s growing gig economy and flexible work situations. We are set to see financial institutions become one-to-one support networks, using data to build tailored experiences for every single customer.
DIY finance 2.0
However, the potential for AI is far greater than all this. This power of AI-led prediction will eventually be handed directly to the consumer, too. In fact, we are about to see unprecedented levels of data, information and guidance built into consumer omnichannel experiences.
Financial institutions have already stepped up their digital offering for consumers – but 2022 will see heightened consumer autonomy across personal finance management. Recognising the benefits for all parties, in a pandemic age of helping customers help themselves, the savviest banks and financial services providers will offer up more predictive analytics directly to consumers across digital channels that are powered from modern cloud core-banking platforms. This will empower consumers to better control their bills, debts, cash and loans autonomously, lowering credit risks for the financial services providers involved. Likewise, as data becomes more structured, explainable and aggregated – financial institutions will finally have a 360-view of their customers, enabling them to open up a new world of tailored propositions.
Following the path to digitalisation in 2022
From this year, fintech developments have the potential to deliver more time and customisation for both businesses and individuals. Consumers are closer than ever toore digitally-empowered financial autonomy, as advisers and financial institutions streamline their manual processes and focus their expertise on what’s important for customers.
To be successful, however, it is imperative that fintechs enter the new year aiming to empower their customers’ financial lives, armed with the necessary banking technology to enable true digital experiences.