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Jump Start 2021: Fintech Innovation Accelerates Digital Strategies in Financial Institutions

Priya Iyer

Priya Iyer

CEO, Vee24

For financial institutions, the year 2020 accelerated the already intense focus on digital.  A recent report from Deloitte notes that the pandemic has turbo-charged digitization for the banking industry, and predicts that banks will continue to elevate customer engagement by “creating an optimal mix of digital and human interactions, using data intelligently, establishing novel partnerships, and deploying compelling service delivery models.”  

A frictionless, satisfying online customer experience is essential to this digital transition and is more vital than ever for capturing new customers, as well as retaining and growing the loyalty of existing ones. As global conditions in 2020 created a dramatic increase in the need for digital services, demand for innovative Fintech solutions rose exponentially. As we kick off the new year, expect 2021 to bring innovations that sharpen the online customer experience in exciting ways. Here’s a look at some of the Fintech trends we expect will impact the industry in the year ahead.

Financial Institutions Will Up Their ChatBOT Game

AI-powered BOTs are agile, deploy in days or weeks rather than months, and help to reduce calls to contact centers. ChatBOTs can be successfully used across multiple lines of business. This automated assistance includes FAQ chatBOTs that can provide a quick answer to commonly asked questions such as, “What are the current rates for CDs?” or “What are the steps to apply for a government loan program?” or can co-browse with the customer to a specific page for more in-depth answers. More sophisticated chatBOTs can support complicated customer journeys and provide the ability to set an appointment with or seamlessly transfer to a live agent. Juniper Research estimates that cost savings from banks’ chatBOT usage will reach $7.30 billion worldwide by 2023, so expect financial institutions to embrace this lucrative opportunity to create efficiency.

Face-to-Face Interactions Become a Must Have

Interestingly, banks’ reputations have rebounded in 2020 as they have found ways to support their clients during the pandemic. Going forward, there will be a demand for video technologies that facilitate face-to-face conversations to build trust in the banking relationship. When making important financial decisions, customers want to be able to look the person they are working with in the eye. Financial professionals want to replicate the in-person experience so they can read body language and connect with customers on a human level. Video technology will be extremely important to companies in 2021 and beyond, given the challenges of limited access to in-branch services in the future.

The Online Customer Experience Will Match In-Person

As more people, both consumers and commercial, are doing business from their homes, banks and financial institutions will continue to enhance the online experience so that it measures up to or exceeds the in-branch experience. Live face-to-face video discussions that build trust are growing. As part of live video chat, banks are adopting real-time collaboration technologies such as high-performance co-browsing, secure co-form fill, and secure file transfer in a single video chat session. These tools allow digital hand-holding during complicated processes such as mortgage or commercial loan applications, which reduces errors and friction for both the customer and the banking representative. 

Small Banks Will Invest Big in Digital Experience

Smaller regional banks and credit unions will speed up their digital transformation in 2021. These institutions are generally known for their strong, often community-based member relationships but perhaps less so their digital savviness. That said, as their members become comfortable engaging online with other types of services especially in retail, these banking organization will have to ramp up quickly to bring their personalized, in-branch experience online.

Agile Solutions that Protect Security and Privacy Will Thrive

Financial institutions will need to adopt technology that provides security and privacy without a time-consuming, disruptive integration that includes large back-end systems. Fintech solutions that are agile and fast to reduce friction for banking customers and employees will flourish in 2021. Mobile-first and solutions that do not require any download from the customer side will help ease engagement and allow banking customers to connect anywhere, anytime, on any device.

2021 Will Be a Landmark Year for Financial Institutions and Their Digital Strategies

Digital banking is shifting from a peripheral service to a central element of financial institution’s customer engagement. That shift has been ongoing for years, but the global pandemic has accelerated it. Expect more customers to abandon in-branch interactions and go completely virtual. Financial executives believe that digital banking will remain dominant even after public health restrictions wane. Fintech innovation will make customers comfortable with the online experience, and many banks are rethinking their physical strategy to reduce costs and drive greater efficiency. 2021 will be a turning point for financial services companies – it will be imperative for them to capture and retain customers by creating an excellent online experience, and innovative Fintech solutions will be the key to success.

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