Banking trends to watch for staying competitive

It isn’t just your Finance department that’s feeling the urge to get more digital. There’s also a new wave of banking industry digital transformation that’s gaining momentum.

Valuable new technologies and digital services may soon be adopted by more financial institutions because they’ll provide data insights that banks didn’t have before.

It may be time to touch base with your banking institutions and ask what moves they’re making on these technological fronts, so you can develop a strategy of your own to adapt and thrive along with them.

Banking changes that can benefit you

Here are three of the top ways banking is evolving:

1. Possible regulation of open banking. When done right, open banking improves competition and consumer choice, expands financial inclusion for consumers normally shut out of mainstream credit products and strengthens consumer privacy control.

Open banking tech allows banks to collaborate with fintech service providers and other institutions to deliver an improved customer experience, such as linking a bank account to a favorite third-party application. For example, imagine collaborating with your bank to offer new customer payment options through social media platforms like Facebook, Instagram and Twitter.

However, consumers give their consent to use and share their info. According to Bloomberg, Americans are still reluctant to agree to share their financial data. Open banking is still a work in progress in the U.S.

2. Leveraging tech to make optimal strategic decisions. Because traditional banking institutions are competing against newer, all-digital banks, they’ll need to be more open to adopting transactions via mobile apps, cloud-based services and artificial intelligence applications. According to the McKinsey & Co. Consumer Digital Payments Survey, 82% of Americans are using digital payments, including browser-based and in-app purchases.

3. The use of blockchain and non-fungible tokens (NFTs). The most popular use of blockchain technology is trading cryptocurrency such as Bitcoin. According to Statista, more than 82 million consumers around the globe were using blockchain wallets as of April 2022.

An innovation that grew out of the rise of crypto is NFTs – a digital asset on the Ethereum blockchain. Although there’s no universal agreement on what the actual value of NFTs is, the one-of-a-kind tokenization and transaction that comes with it has tech-savvy investors excited.

Because blockchain and NFTs have the potential to alter payment processing and bring in new revenue, it’s going to be important to know what your bank plans to do about processing crypto payments.