2020 has marked the end of crucial Financial services in the country due to which we have witnessed a lot of disruption and positive innovation that brought about new opportunities – not to mention, challenges – for Banking Industry and thus enabling banks and financial institutions to prepare for the opportunities and challenges that lay ahead. The most important innovation among all these is the stiff competition we are facing these days with the developing innovative technology in the market.
With the increase in the use of the Internet around the globe, consumers are becoming tech-friendly and shifting from the traditional banking method to the Mobile banking method especially digital payment solutions.
This Digital payment system has offered its users the best convenience, speed, and reliability compared to conventional banking systems. To compete with these new Agency Banking solutions or the peer to peer payment application Banks and financial institutions are struggling to align with the shifting consumer behaviors and expectations. Below are the key trends which are expected to impact the digital banking sector for the year 2020 and beyond.
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International Payments would be transformed via technological innovation
In today’s technological world no one is willing to pay hefty processing fees for cross border payments. As the customers would be demanding smooth payments the banks will be competing to offer ever faster cross-border payment services to their customers. This will lead to wider adoption of new technologies thus enabling the banking sector and other financial institutions to transfer payment in time at a fraction of the cost with the incumbent process. Thus making 2020 a year for the banking industry to increase efficiency and innovation for cross border payments.
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The rise of the banking industry as a service will drive stronger competition in the market
Nowadays with the growing innovation, the banking industry is facing huge pressure to cut down the technology cost and due to which more and more financial institutions are turning to cloud providers to help radically reduce their IT costs. Developing FinTech Innovations like Blockchain, AI, and cloud-based solutions are cost-effective and are creating a strong competitive advantage for agile, forward-looking financial services providers that embrace digital innovation – intensifying market competition around the globe.
Many well known Cloud Platform players like 10X and Thought Machine are great examples of this new paradigm shift which is being adopted by banks, and it is assumed that more players would be entering the market in 2020 and beyond. Thus replacing the on-premise banking with more agile and affordable cloud-based digital banking solutions.
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Digital payment solutions
In 2020 there is a new rise in consumer purchase solutions for tourists and travelers to enable cross-currency payments without any cards. It can easily be done with the help of Mobile Banking software QR code within a fraction of seconds. This Digital payment solution could have a huge impact on the banking industry thus bringing more opportunities for payment providers in the coming months.
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Micropayments will become mainstream
With the help of technological innovation, there is a huge cut down in the processing fees of payments which in turn is making use of micropayments more feasible. Earlier micropayments were confined to messaging apps but as big tech companies are introducing there own digital payment services they need for micropayments is expanding far beyond. In 2020 many developers would be coming up with solutions to satisfy demand in-app, real-time micropayments. For example, micropayments can be used by incentivizing players in the gaming industry to creating new payment models for the streaming of online content or paying for energy/electricity bills.
The rise of digital lending
The adoption of digital banking technologies has the potential to be a game-changer for SMEs all around the globe. For traditional banks and financial institutions to stay competitive in 2020, they need to introduce digital lending services. As we all know due to the COVID 19 outbreak SME market has been rewarded with many offerings it has become a must for the traditional banking and financial institutions to provide a far more flexible, efficient, and effective approach for the SME’s.
This digital lending process will help them to improve cash flow and reduce the cost of running a business while freeing up there capital for reinvestment. This will lead to an increase in digital payment services for SMEs which would help them to expand and process immediate payments thus improving access to new markets. Thus, In a nutshell, it can be said that digitalization is going to be an active part of the Financial and banking sector.
It can be said that that upcoming innovative Digital technology for the Financial and Banking sector is continually changing and adapting itself to regulations and opportunities. It is assumed that the Financial and Banking services in 2020 will make complete use of cloud-powered technologies like AI, machine learning, blockchain, big data, and analytics to continue there services for its customers.
