Data has become the new science and the driving force for the growth of every industry, including financial institutions. The banking industry is embracing the traits that were once limited to the Fintech segment such as data and analytics. The spurt of big data lately has created wide opportunities for the banking sector to thrive. Data has emerged as a key asset to stabilize the overall evolving banking environment.
Knowing the tremendous impact of analytics and the way it has completely transformed the banking operations and functionality, it must be considered at the heart of every initiative. Let’s discuss some key banking analytics trends to watch for in 2020.
Rich Data-enabled Personalization
Banking initiatives have been targeting demographic-based clusters such as young and older people until a few years ago, but the trend has changed somewhat in 2019. Many banks have started targeting customers based on their aspirations, values, mindsets, and lifestyles. This ultimate switch in the level of personalization witnessed incredible growth in 2019. In 2020, the trend is likely to further escalate with an increasing number of banks focusing on individualized banking experiences for its customers which is the highest level of personalization derived through data and advanced analytics.
The Growth Prospect of Open Banking
Open banking is the key area of financial services that is taking the banking sector by storm. The growing trend of secure data sharing (via APIs) with third parties to strengthen new financial services has given more freedom and control to consumers in terms of how they interact with financial service providers. The industry has started recognizing the potential of Open Banking and how it is redefining the financial landscape by enabling financial services providers to improve service offerings and optimize overall customer engagement. There seems to be no reason to think that it is going to subside anytime soon.
The growing number of customers shifting to digital channels, coupled with the high expenses of a physical branch network is driving the pace of digital-only banking entities. While some financial institutions are launching digital-only banks to collect deposits, others are leveraging digital platforms to offer lending, investing, and specialty services. In both cases, the focus is on delivering an innovative-cum-valuable experience to the consumer, backed by customer data and advanced analytics. Similarly, an increased number of banking organizations are likely to move to digital-only banking in 2020 to protect their customer base and expand their market share.
AI-Driven Predictive Banking
Predictive banking is expected to emerge as the most innovative and interesting banking trend of 2020. This is the first time when the banking industry can combine rich internal and external customer data, not only to know their customer better but also to build their predictive profiles. The enhanced use of data will enable financial institutions to take the next best actions to provide consumers with value-driven services.
These banking analytics trends will dominate in 2020. Banks seeking to become digitally-first banks, but don’t know how to start, can explore opportunities with Arttha, a Unified Fintech Bank. Arttha’s digital wallet, digital banking, and core banking solutions and platforms can help you thrive in the new norm scenario ahead.