Banks have a lot on their plate in 2022 in terms of keeping pace with technology and meeting customers’ changing digital expectations.
There is no arguing that the pace of change in financial services in the last year has been unprecedented.
For example, banks were ultimately pushed into a corner as online banking increased by as much as 50%, resulting in 60% of organizations introducing artificial intelligence, according to a Mckinsey report.
The question is, will the speed of automation continue now that we’ve adapted to new ways of working?
An increased demand for mini apps and micro apps to enhance the customer experience
Every financial services institution strives to have the smoothest and simplest online interaction with clients. To achieve this in 2022, we will be seeing the massive growth of pre-built, plug-and-play niche technology platforms that can be integrated into customer-facing programs.
This trend embraces the popularity of low code/no code and the emergence of composable technologies – using out-of-the-box, plug-in software platforms that interact seamlessly into your own stack. In fact, Gartner also agrees that composable technologies are a strategic technology trend for 2022 and goes even further to say organizations that have adopted a composable approach will outpace competition by 80% by 2023. It requires no developer knowledge, allowing what used to take months to be built in days.
Already trained and pre-configured to process any customer request, these mini and micro apps – or applets as they’ll be known – will provide a much faster and more sophisticated level of service. They can be consumed and configured to use within a bigger process or to inherit as an entire procedure. The option of integrating an entire process, a mini app, or just part of the process, a micro app, is what allows flexibility and greater efficiency through using best-of-breed technologies that are pre-built specifically for the financial services industry.
A good example of a mini app coming into play is during customer onboarding when proof of identity is the first hurdle. The customer will be able to self-serve and trigger the app to take them through tailored ID verification before being automatically returned to finalize the rest of the onboarding process. But in some circumstances, a micro-app may need to be called – a specialist pre-built app specific to document types – such as W2, invoice, a selfie, or other specific use cases. It’s all about building a high-level solution out of the best parts.
In summary, these low code/no code, plug-in technologies will not only be easily deployed, save a fortune in systems development, and accelerate time to market, but dramatically improve the overall customer experience – which is the number one priority for financial services in 2022.
Increased analytics on automation costs
While this may not be unique to financial services, it is certainly where I am focused. The uncertainty over the last 21 months meant business leaders in every industry had to re-think their expenditure for automation and process efficiency. This will be a leading theme in 2022 as banks and other financial institutions focus on optimizing costs. They will need to gain true insights on exactly how their processes work and where efficiencies and inefficiencies lie. They may have handoffs with bottlenecks, errors, and omissions, and repeated data entry. These flaws can be detrimental to both customer experiences and the bottom line. This will see organizations invest in process intelligence – advanced AI technology that digs deep into your operations to scrutinize procedures and tell you exactly how it can be done better – BEFORE deciding where to move forward with digitalization. With real-time insights into automated workflows, content, systems, and people interacting with them, process intelligence is needed for overall operational optimization – in other words, ensuring you invest in the right changes so your budget is spent most effectively.
One area where improvements can be made is onboarding. A recent survey showed only 15% of financial services executives are highly satisfied with how long it takes to onboard customers. Not surprisingly, almost half said they want to accelerate onboarding, and 33% want to improve it, yet it ranks low on their list – showing a strong disconnect between the data and executives’ beliefs about onboarding challenges. This is why accurate insights into processes are important for financial institutions before they invest in automation. The goal will be to capitalize on and optimize costs, especially since over half of the top organizations will be spending more on automation in 2022.
The user experience is a top priority
Research among leading bankers showed the overall majority, 73%, cite improving customer experience as their number one priority, followed by reducing operating costs.
The underlying focus throughout all automation will thus be on the user experience in 2022. People are becoming less tolerant. It’s called digital fatigue — if you’re making customers go through three to four clicks for a simple task on their mobile device, then you may have lost them to the competition who‘s delivering the experience with a single click.
Also, the idea of brand loyalty no longer exists — that era ended with our grandparents, who would use the same bank again and again for their lifetime of major purchases.
Now, people will shop around and do their homework. If they obtained a good rate with a particular bank for a loan, they will still look elsewhere for the next best deal — social media recommendations, influencers, comparison sites, etc., all come into play. This is especially true for millennials and Gen Z.
In fact, 67% of millennials say they would try financial services from brands they trust that are successful in other sectors, like Nike, Google, and Apple, that may not currently be offering financial services products. Apple has found a way to capitalize on this millennial shift away from credit cards and traditional banking products, fueled by their own crippling student loan debt and a market crash that significantly impacted their parents. The Apple card is a beautiful, white, titanium card that arrives in a special envelope, encased in a cardboard sleeve, and has found itself the subject of numerous “unboxing” videos on TikTok and YouTube. Perhaps that aesthetic distracts the new cardholder from the fact that the card is backed by a 150-year-old American multinational investment bank.
As you can see, banks have a lot on their plate in 2022 in terms of keeping pace with technology and meeting customers’ changing digital expectations. Unfortunately, those who don’t step up to the challenge may not be ringing in a happy new year in 2023.