As the world evolves and advances technologically, it becomes more and more imperative for markets to adapt to these changes and make use of them effectively. Otherwise, newer, more innovative solutions will take over. Financial institutions are no exceptions to this fact of life. Megatrends have already swept the financial world in recent years, changing rapidly to accommodate for an increase in emphasis on customer experience.
The convenience of mobile transactions is greatly reducing the need for physical cash. Mobile payment has already infiltrated our everyday life: ApplePay allows you to pay with the tap of your phone. Mobile ordering has been implemented by companies like Chipotle and Walmart, and entire businesses have been created around it—like Uber and GrubHub. Banks are getting on board as well, with features like mobile deposits on an app. And, some banks are totally online, such as Ally and Schwab. The power and convenience of mobile transactions are being realized. Not only does the cashless world streamline payments, but it also reduces the cost for businesses and institutions. As the popularity of electronic transactions grows, the cost to make them will drop. This megatrend in finance has the potential to lead to the eradication of credit cards, further disrupting current financial norms in favor of consumer convenience.
With more becoming automated, the ability to use machine learning and big data to isolate trends and customer demand becomes more useful and highly accurate.
Machine Learning and Big Data
The gigantic amount of data captured in finance makes it an ideal candidate to reap the benefits of machine learning. For purposes of improved customer experience, financial institutions can use ML to automate processes such as portfolio management, to optimize customers’ assets, and customize according to their individual goals. It can also be used to provide recommendations for financial products, like personalized insurance plans. Not only is the process more individualized, but it comes at a lower cost to the customer.
Institutions can use big data to isolate problems and inefficiencies much quicker in different facets of their business, such as identifying and fixing problems on a mobile app. Not only does this problem eradication save money, but it also provides a smoother, more pleasant customer experience once again.
Overall, in order to stand out, financial institutions will have to create more individualized products to meet customer demand. For large and small businesses alike, having a working understanding of financial megatrends and using them to predict the desires of your audience is one huge component to successfully unlocking the full potential of ever-changing markets.