Richard Dratva: «Five Banking Trends That Will Interlock in 2019»

Richard Dratva: «Five Banking Trends That Will Interlock in 2019»

With significant improvements in the digital offerings by financial service providers, banks that hesitate with their digital transformation will struggle to keep pace, writes Richard Dratva from Crealogix.

By Richard Dratva, Board of Directors Vice President & Chief Strategy Officer, Crealogix

• We will see significant improvements in the digital offerings of financial service providers. The customer will increasingly benefit from digital progress and increased digital competition in the financial industry
• Banks that continue to hesitate with their digital transformation in 2019, will struggle to keep pace and will face limitations in their scope of action.

These are the 5 trends that will interlock in the coming year:

1. Open Is The New Banking

Open banking has long ceased to be a first mover topic. Financial ecosystems based on Open Banking are entering a new phase: Banks, third-party providers and technology companies are developing applications and connecting them into a seamless banking network environment that is integrated into the customer's environment and needs.

However, we are still at the beginning of this path. Financial service providers that have the resources are beginning to build their own ecosystem, placing customer perspectives as benchmark. In order not to overstretch the patience of customers, it is about time to bundle the confusing multitude of individual applications. Banks often underestimate the demanding task of orchestrating applications, delivering attractive digital services securely and, in particular, aggregating bank data.

2. Convenience Is The New Loyalty

This relatively new proverb in the digital world is also gaining ground in banking. So-called «low-effort» experiences lead to higher usage or higher turnover per customer, quite the contrary to «high-effort» experiences, which increasingly deter customers and motivate them to switch banks. Regular activation and stimulation by the bank are becoming more important, because the customer wants to be connected with his bank.

Making it as convenient and pleasant as possible for customers to conduct their banking business, like Amazon or Alibaba, remains one of the largest challenges in the industry. This means not bothering the customer with the complexity of the interplay of different applications: The user interface should not give any hints of the sophisticated architecture behind it.

3. Smartness Is The New Personalisation

AI technologies are now so mature that they support banks in serving customers individually – smart personalisation rather than schematic personalisation. Self-learning algorithms predict the customer's needs at a specific time and in a specific situation and suggest suitable products.