We saw firms transform the way they interact and engage with
their customers and employees, deploy new operating models to accommodate
extreme end-to-end digitisation internally and with ecosystem partners, and
embrace new ways of doing business (e.g., platform business models) and new
types of products (e.g., digital assets).
However, with the introduction of vaccines and our world
striving to get to the next normal, will these trends continue?
Here are three of the most important trends we will see in
2022:
Changing customer behaviors
The emergence of platform players has changed the way
customers go about their daily activities and the way companies conduct their
business. They leverage the power of platform-enabled ecosystems to reduce
friction between customer value chains within and across industries like
housing, commerce, mobility, communications, media, travel, health, and others.
By controlling the customer interface, these platform
companies can influence financial services use. For example, a customer seeking
to book a vacation on a company’s platform can have the payment, insurance, and
a loan bundled into the value proposition through a partner financial
institution.
These platform companies reduce the cost of financial
services by regularly switching to lower cost financial institutions, further
commoditising the industry products. Many of these players are now building
their own financial services capabilities to embed into their platform
offerings.
With proprietary access to more customer data points, they
arguably are able to make better decisions on product offerings or credit
decisions.
Rising cybersecurity risks prompting an increased focus
by regulators
Accelerated digital adaptation, expanding partner
ecosystems, and new business and operating models have fundamentally changed
the way financial institutions are built and run. While this has helped
financial institutions improve operational efficiency and customer engagement,
it has also raised concerns on the resiliency of these new models and the
opportunity for security breaches.
This has gained the attention of regulators around the
world, with a heightened concern for highly regulated industries, like
financial services, in their ability to respond to escalating shocks driven by
security breaches and uncertain economic conditions. In 2022, this will lead to
regulators enacting new laws that improve resiliency and security as well as
modernise infrastructure.
Investment in artificial intelligence (AI), with an eye
toward ethical practices
AI has transformed industries around the world. The
financial services industry specifically is investing in technologies that
transform their data environments and accelerate the integration of AI
capabilities into their operations to enhance customer experience, improve
operational efficiency, and reduce fraud.
In the year ahead, we will see financial institutions
continue to accelerate the use of AI, while also considering ethical aspects
that integrate trust and transparency into the technology. This can be done in
a few ways, including:
Promoting trustworthy behaviors within the organisation by
implementing governing boards and guidelines that all employees must follow –
from engineers to policy advisors.
Investing in diversity in datasets, practitioners, and
partner ecosystems. This is particularly important as we see partner ecosystems
growing in importance in the year ahead, helping organisations to develop more
open architectures and improve risk mitigation.
Looking ahead
This past year has demonstrated that today’s customer wants
more personalisation, digitisation, and choice in how financial services are
accessed and consumed, which has, in turn, impacted financial firms in how they
manage their operations.
In 2022, this trend will only continue to accelerate as
firms balance their investment in technology with the associated ethical and
security risks.
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