2021 was an explosive year for technology in the financial sector. So, no surprise, 2022 is dealing with the ramifications of all those changes that settled and became permanent.
Some, much to the angst of the industry, were established by popular demand. Others have been cooking for a while and are coming up to full manifestation now in terms of ready architecture and wide-ranging acceptance.
Blockchain
For many years, Blockchain technology has been predominantly associated with Bitcoin. However, 2020 was the year that crypto exploded and got everyone’s attention. That, in turn, drove demand as well as a spotlight on that aspect of digital finance.
Now, the financial industry is in a race between them and the government as to who is going to define the acceptable architecture for mass adoption of blockchain for financial usage.
Government regulation is kicking into high gear and may prematurely stifle new technology before it’s fully explored because of fears and the potential risk to the fiat currency system. In the meantime, financial service providers are realizing the exponential efficacy of blockchain for wide-ranging data uses well beyond just trading currency value.
This mix is going to continue to drive and divide Blockchain adoption, especially as governments and big financial institutions want to centralize control and the general market wants it decentralized.
Mobile-First
Digital mobility will continue to become paramount in the technology race. People want to carry their digital value with them much the same way as a traditional wallet, as well as use it wherever they go. That means the infrastructure for digital transactions and convenience will continue to grow. Those who have the newer tools will see more of the market being receptive to mobile. Those holding onto old methods will find their markets shrinking. This includes being able to access financial services while on the go, from trading to banking to investment.
Cloud Technology
Given all the typical advantages of cloud technology, it’s no surprise that the field continues to be used by more and more players. However, where the large financial institutions would be an expected presence, cloud technology is actually giving far more smaller players a leg up. Due to scalability, low-cost operation, flexibility, and wide reach via the Internet, cloud technology allows smaller players to actively and aggressively perform like large players. So, it’s a disruptor in the financial market for those looking to niche their way in. The success of Robinhood and its reliance primarily on a mobile app approach for trading proves that case. However, with cloud technology comes security risks, particularly with how many additional partners are needed for support. That risk-side of the picture means heightened security demands in 2022 will also grow fast.
Artificial Intelligence
Looking for ways to operate 24/7 as well as at faster speeds of processing, artificial intelligence is receiving a serious look now with regards to financial service architecture. For years, it was already being used in the trading world with quant investments and similar. However, now the tool is being applied for data mining, customer service tracking, account behavior tracking, market observing, and interest shaving generation on margins. In fact, much of the institutional trading has some kind of AI already in place. However, the customer side of financial services is still open territory. To the extent that AI becomes complex enough to handle customer needs 24/7, it will again redefine how financial services are delivered around the clock.
Improving Customer Experience and Technology
Being a service industry, financial service providers need customers. And that aspect only grows when customers are both satisfied with the value they receive as well as end up wanting more, even enough to share the benefit with others. To that end, financial service providers will find themselves in a hot race to provide greater and greater convenience, regularly being pushed from the bottom by new technologies becoming standard place as well as minimum expectations from customers. For example, just a decade ago, the idea of online banking 24/7 with full-service access was not widely available. Now, every bank has online access to personal and business accounts provided.
Furthermore, financial service providers are also chasing the curve of what’s known as the “CSI Effect.” CSI is a TV show that glamorizes police forensics. However, doing so made juries think that the technology in the TV show was actually available in real criminal cases, which in turn created a negative impression towards prosecutors who did not produce such technologically-advanced evidence during a trial. The same effect is happening in the financial services industry. People are building an expectation that established companies should use the latest technology and communication tools. When they don’t, cognitive dissonance occurs, and people become disappointed, looking elsewhere for “better” services. Companies have to be aware of this factor and make sure they are not falling trap to it, but, at the same time, their customer service tools need to be on par with the market. It’s a fine line that financial service providers will be walking, trying to remain relevant without spending the bank on every new customer-oriented technology that comes along.
Focus on the Omni-Channel Effect
Financial service providers will need to build a 365-degree experience to provide the cutting-edge customer appeal that stands out in 2022 and going forward. That involves an interactive placement in customers’ lives and businesses versus just being available for the purpose of finance alone. Because so much of digital access and convenience is now becoming a blurred market zone, the providers that stand out will be using mobile-first, blockchain, artificial intelligence, and similar in a combined manner. This approach provides multiple avenues for revenue generation going beyond just traditional financial services, but companies will also need to be willing to commit to building the platforms to make it happen as well. Relying only on third-party cloud technology is not going to pass muster with a highly selective and digital-savvy market.
A New Set of Rules with Moving Goal Posts
Companies needing guidance and skilled partners for navigating the changing financial service landscape will be in good hands with Consolidated Communications. One of the key differences between companies that are charging ahead and those that are floundering is in the expertise they bring on board to adapt to the new market demands driven by the latest technology. Because Consolidated Communications provides an architecture based on fiber network capacity and reliability, we’re able to help companies build out their new platforms with stable support, high-traffic capability, and secure channels that block even the most persistent unauthorized attempts at diverting traffic.
Consolidated Communications continues to be the industry leader in financial services development and project architecture design for today’s cloud tool expansion. Don’t be left behind; get ahead of the curve by partnering with us. Contact us today to discover how we help your financial services organization keep up with today’s latest tech trends.