The Financial Services Megatrends

Years from now, we’ll look back on 2020 as a milestone year for the financial services sector. While it’s still too early to assess the overall fallout from the COVID-19 pandemic, the crisis has already acted as a radical catalyst in the industry. The global fintech market is expected to achieve a CAGR of 20% over the next five years, reaching a total value of more than $300 billion by 2025. It’s a period of unprecedented rapid growth, primarily brought about by investment in game-changing technologies to help banks and firms adapt to the so-called “new normal.”
Banks and financial services providers have been the vanguards of “convenient technology” for a number of years. We know that customers prefer omnichannel interactions. A seamless digital omnichannel experience drives customer loyalty, increases brand engagement, and creates cost-savings. Now, more than ever, banks will be looking to hang onto that hard-won loyalty as the digital disruptors snap at their heels.
The fintech sector is definitively driving the disruption, aided by key regulatory changes and a customer base that’s more than ready for digital. Infostretch is working with financial institutions and digital challengers alike to help them take advantage of the trends that are shaping the industry. In recognition of our standing in this space, NelsonHall described Infostretch as a “major player” in a recent industry report.
Below is Infostretch’s take on the major shifts that financial services companies need to prepare for now in order to stay competitive in the future.
Digital wallets and contactless payments
Even prior to the pandemic, contactless payments were enjoying a steady increase throughout the world. Now, as retail outlets and restaurants emerge in their new, COVID-safe state, they’re going to be doing everything they can to limit unnecessary contact and adhere to social distancing measures. Even the World Health Organization has strongly advised against the use of physical cash where possible. Consumers appear to be heeding the advice, with more than 50% of Americans now preferring to use digital wallets and contactless cards wherever possible. Of course, this technology isn’t new, but its rapid uptake could be a sign of things to come.
2020 could very well be the year that accelerates our move toward a cashless society.
Secure, verified and traceable transactions
Where there are digital transactions, there are security concerns. As banks seek to accelerate their transformation to digital, these security concerns are going to increase tenfold. Even before the pandemic, 90% of banks were actively exploring blockchain as a means of safely transmitting data in a seamless, cost-effective way. Blockchain, a fully networked “ledger” of transactions, is equally and anonymously accessible by every single one of its users. Infostretch’s digital banking clients are actively using blockchain to streamline software delivery processes and make them more agile, collaborative, and secure. Decentralizing the ledger in this way can lead to faster clearances on payments, reduced fees, smaller operational costs, and, crucially, much tighter security.
24/7 banking killing off bank branches
Digital banks have been exploring new ways to engage with customers and adapt services for some time now, but the drive for differentiation just went into a new gear. As early as March, JPMorgan Chase