Key trends in financial services to look out for in 2020
The last few years have been turbulent for financial services:
- FinTech start-ups have disrupted the sector and driven seismic change, leaving legacy institutions playing catch up
- Significant regulatory changes following the big crash in 2008 have changed the landscape
- Customer expectations have risen, based on experiences in other sectors, forcing finance brands to raise their game
- The buzz around blockchain and its potential to bring increased transparency, speed, trust and reduced costs to the financial ecosystem
- The rise of artificial intelligence and automation in general
- Growing awareness and fears of cybersecurity, as institutions struggle to keep pace with technological change
As 2019 draws to a close, what key trends can marketers expect to see in financial services around the world in 2020?
1) The continued growth of personalisation
Machine learning and artificial intelligence lead to more efficient data analysis, which in turn makes it easier for marketers to deliver hyper-personalisation to consumers. Increasingly, this will involve more sophisticated personalised user journeys nudging customers along the path to purchase. Customers are used to receiving content and information relevant to them from brands like Amazon, Netflix and Spotify. They expect the same from their financial service providers. Some ways to deliver this include:
- Providing relevant CTAs based on the lifecycle stage
- Recommended on-site content based on customer data
- Appropriately timed cross-sell and up-sell messaging
2) Artificial intelligence and machine learning
Related to the above, the rise of artificial intelligence will only accelerate. Expect more chatbots and robo-advisors helping customers on a daily basis (not just in banking but across industries). Chatbots can take on simple queries or more complex tasks, such as suggesting investment plans based on customer spending goals and risk appetite profile. Increasingly, AI will be used to identify market opportunities and devise e-commerce solutions in response. In particular, automation will reverse the trend towards off-shoring in recent years, as tasks can be performed at a more competitive cost on-shore – driving a trend towards re-shoring and localisation.
3) Voice technology
People have been talking about the rise of voice for a while (similar to how it was the “year of mobile” for at least five years…) but banks have started to catch up on voice technologies. Expect to see more finance brands competing to integrate voice tech to allow customers to complete various tasks using voice. For example, Capital One has been an early pioneer of using voice for everyday banking tasks, whilst Morgan Stanley has created a voice application that allows customers to access market insights.
4) Self -service
The idea of going into a branch or dealing with an agent for simple things like depositing money or making payments seems antiquated these days, and consumer demand to do more complex transactions – transferring money abroad, accessing digital currencies and so on – by themselves is set to accelerate. Mainly this will be built around mobile/smartphone usage. The obvious benefit for business is cost efficiency and competitive advantage.
5) The sharing economy will be embedded throughout the financial system
The sharing economy is entrenched in cars, taxis and hotel rooms, and expect to see more of this in financial services in 2020. We’ve already seen P2P lending, social payments, crowdfunding and P2P insurance but the implications for the future go beyond this. We will increasingly see platform or on-demand companies like Uber, Grab and Airbnb take over daily financial transactions through digitally connected communities.
6) The rise of Asia will continue
Economists have been talking for years about the shift in economic power from West to East. Asia is already home to over half the world’s population and, according to the UN, 21 of the world’s 30 largest cities. Although the region’s economies are diverse in terms of maturity, collectively they are being supercharged by rapid innovations in smart devices, data processing and real-time communications technologies. Singapore is rated amongst the world’s leading FinTech hubs, Hong Kong is another. China now has the world’s largest peer-to-peer lending market and more smartphone users than any other country in the world. Expect more research and development leading the field in Asia, leading to more innovation and Western companies seeking an Asian foothold as a consequence.
. . .
These are just six trends but one thing is certain: the industry’s future is certain to be turbulent, with more digital disruption, industry convergence and shifting power around the world. The brands which succeed will be those which evolve rapidly.
Tom Montague | Head of Content, Oban International
Oban International is the digital marketing agency specialising in international expansion. Our LIME (Local In-Market Expert) Network provides up to date cultural input and insights from over 80 markets around the world, helping clients realise the best marketing opportunities and avoid the costliest mistakes.