In recent years, the finance industry has experienced insane growth and innovation, disrupting consumers' expectations, finance institutions' operations, and overall how we interact with our money. The rise of new technologies combined with international events has shaken the market for the next decade– but how is 2023 going to look for the finance industry?
Imagemaker has identified some key trends that are likely to continue or accelerate in the coming year. These will significantly affect the overall landscape, regardless if you're an active actor within the industry or show interest in entering this attractive market.
1. Open Banking
When discussing open banking, we refer to application programming interfaces (APIs) provided by financial institutions to third parties to share customers' financial data. Open banking breaks the predominantly centralized model in the banking industry, allowing tech startups and other industry actors to gain a competitive advantage. By facilitating information exchange, customers can choose from various options to administer their financial situation.
It's no coincidence that Open banking goes hand-in-hand with the increase of apps and mobile services. According to Statista, projections for mobile users worldwide will reach 7.49 billion by 2025. This audience shows excellent potential for banks and financial institutions looking to gain new and current customers, making this technology a crucial facilitator to sharing and storing data. As a side note, at Imagemaker, we have covered more extensively this topic in our second edition of Makin' Trends.
2. Artificial Intelligence
There's no denying that artificial intelligence plays a major role in the finance industry by achieving problem-solving through computer science and big data. Banks and institutions will continue to adopt strategies incorporating AI solutions to reduce operation costs, implement chatbots, automate internal processes, and strengthen cybersecurity measurements. Just consider that Insider Intelligence estimated the potential cost savings for banks in North America, reaching $447 billion by 2023!
On top of this, more companies have embraced artificial intelligence to support complex decision-making processes involving their customers, such as granting loans or determining credit risk. While it's true that AI usage within the finance industry raises ethical concerns about potential biases and customer privacy, these drawbacks are addressed by synthetic data and increased transparency.
3. Cloud-based Solutions
As we have previously discussed at Imagemaker, financial digitization demands a mindset change toward real-time and integrated updates, and cloud infrastructure provides a way to access services and applications via the internet. By moving away from local providers, cloud-based solutions will give a significant impulse towards scalability and flexibility within the finance industry.
Not only will customers benefit from greater convenience and accessibility by choosing any device to access their banking needs– financial institutions can easily add new features at a lower cost, with overall lower maintenance and update costs of cloud providers. In addition to this, banks can respond quickly to customer needs or market conditions and scale their solutions without investing in additional hardware or infrastructure.
Even when we set aside the disastrous scenario faced by cryptocurrencies in 2022, blockchain technology has already revolutionized the financial industry and will continue to make an impact throughout 2023. With more secure customer and business data storage, interoperability gains a central role within the industry to ensure seamless information exchange between financial institutions.
In addition to this, we will continue to witness an increasing use of blockchain for internal use among financial organizations, whether for connecting information chains across ledgers or ensuring consistent customer data. For example, transaction mismatches can get automated thanks to the transparency created by the shared records.
Overall, the technology finance industry will likely remain dynamic and fast-paced in 2023, with these trends and potential new developments emerging through the year. As we move towards more extensive market participation from venture capital companies and fintech startups, traditional institutions must listen to their customer's needs and adapt accordingly.
Companies must show a higher digital maturity to deliver high performance, transparency, and security to their customers, taking further steps into digital transformation. Are you involved in the finance industry and looking to push your organization's goals toward innovation? Contact us to discuss the best way to incorporate these technologies into your business! Imagemaker is compromised to create tailored digital solutions and become your long-term digital business partner.