Finance, banking, insurance, mortgages, and even investing is becoming an increasingly more digitalized experience. As 2020 draws to a close, there is not much that we cannot do online, or from our phones. This new reality brings with it a decrease in human interaction, less need for bricks-and-mortar premises, and the integration of innovative techs like AI, blockchain, biometrics, and virtual currencies.
So how are financial institutions reacting to the demand from customers for increased digital accessibility? Are they embracing it or hesitant to be trailblazers?
Which financial sectors is it disrupting?
One of the first conventional financial institutions to embrace the possibilities of the online world was the banking sector. Online banking started back in 1997 but didn’t really become popular until the early 2000s. First, customers would access their accounts via their browser and physical pin pads or other devices. Now, online banking has almost completely transitioned to the smartphone where account holders can receive, send, and check their account through fingerprint authorization. The use of QR codes, other forms of biometrics, and wallet integration is also revolutionizing the way we manage our funds online.
Another example of how the internet and technology are improving the way we interact with financial institutions is online mortgage comparison sites. Previously, homebuyers would have to approach mortgage providers individually and often in-person to find out about rates, terms, and available deals. Now through sites like Trussle, buyers can compare mortgage rates and other variables online and with just a few clicks. This significantly decreases the time it takes to find the right deal and provides you with all the information needed in one place, in just a few seconds. The ability to search for and acquire a mortgage from over 90 providers online makes the buying process more efficient.
Investments are another sector of the financial services industry that is being disrupted by the use of digital technology. Years ago, people would invest in the stock market through a broker they would contact by telephone or even telegram.
Then it progressed to email, but now the majority of traders use their mobile phones and devices to conduct investments of many different kinds. Forex, assets, stocks, bonds, and more can be bought, traded, and sold with just a few swipes of the finger. This has helped to open up the market to millions of new traders that previously thought it was not accessible. Today, your average person can hold and manage diverse, international portfolios wherever they are and whenever they want.
As we move forward, we can expect to see greater digital integration including more emerging technologies. AI and VR are expected to take a front seat in many financial sectors, making our lives easier through the automation and simulation of various scenarios. Blockchain – something that was once eyed with suspicion – has also successfully transcended into the mainstream. It’s being used by banks, investment firms, insurance companies, and other kinds of financial institutions to help streamline processes and eliminate fraud.
The future is here and it’s very much digital. Those that embrace it will enjoy greater customer satisfaction, those that don’t will lose customers. As for consumers, their desire for convenient, more efficient, and more advanced solutions to their everyday needs will drive forward further evolution.