Disruption is the keyword of the 2000s. Age-old industries have been shaken to their cores through new technology, and it is in the personal finance world where it is most ripe for disruption.
Personal finance and banking used to be about personal interactions, meetings with bank employees and standing in long queues to process payments. To apply for loans for your business or to purchase a home required that you present your proposal to the bank manager or division manager. However, the digital world has changed that for the better.
Payment apps from third-party technology firms have made payment for products and services simpler and easier through processes such as voice, NFC, pay wallets, and more.
In fact, the banking industry is under the most pressure to adapt their practices to meet their customers growing demands. Customers are bombarded with banking and personal finance products on a daily basis and they purchase them through third-party institutions and businesses without the need to interface with established and archaic banks. Brand loyalty is one of the biggest sufferers of digital technology.
That should drive banks to change their old ways and in 2020 we are starting to see that banks are offering products and services betters aimed at improving customer experience. The leading banking firms are buying technologies from FinTech developers to add more layers to their offerings. In this way, digital technology is driving their business into the 21st century.
While customers expect services from banks to be easier, it is bankers who are developing smarter and stricter security measures to protect their customers’ sensitive personal information and data. Once more, FinTech are developing software and packages to this end. Through AI (Artificial Intelligence) and other software processes, banking is becoming faster, simpler and even offering more value to customers. Things such as chatbots and voice assistants, as well as branching into platforms such as WhatsApp have brought banks closer to their customers and also allowed their customers greater control of their personal finance.
One of the biggest breakthroughs is Amazon’s Alexa system offering voice payment for purchases – and this is in turn leading to Amazon’s Alexa being able to interface with financial service providers to make the process of moving your money and paying for purchases even easier. It is only a matter of time until the other big technology services such as Google, Apple, and Facebook roll out similar products.
Turning the personal finance system on its head through digital disruption means that customers are able to pick and choose services from different banks for specific needs. One bank might offer the best mortgage solutions, while another offers intelligent and interactive investment tools, while another offers a savings account. There are developers who have interfaced these different services and service providers into one easy-to-use app, and this third-party integration will soon become more readily available. Naturally, banking laws and security regulations are now in focus. Who owns your personal information and data? Does the third-party have a right to this information and how should your information and data be handled, stored and managed? That is an on-going process and it will soon be completed. Once that is ready and regulated, expect your banking and personal finance services to become immediately more personalised, easier to use and far more intuitive in their offerings.