2021 Trends in Fintech and Financial Services

Dec  03 
Todd Horvath  Head of Account Processing Services, Fiserv 

Building a robust, future-ready digital ecosystem

As if digital transformation wasn't moving quickly enough, COVID-19 accelerated every trend that had been building steadily for years. The pandemic has dramatically increased the number of people engaging with their financial institution digitally, and the breadth and quality of the experience has gotten much more important, seemingly in an instant.

Certainly, the pandemic has sparked major changes in the way people manage their finances. Our recent research on how COVID-19 is affecting people's financial behavior confirms clear increases in use of mobile payment apps, mobile check deposit, tap-and-pay cards and person-to-person payments, both through financial institutions and other providers. We've also seen decreases in cash, checks and ATM use.

Based on what we know about digital engagement, those changes likely will remain in a post-pandemic world. While people might at first be reluctant to use new digital tools, once they're comfortable with them, they rarely go back.

As consumer expectations shift in this quickly evolving environment, financial institutions realize that creating a robust digital ecosystem is fast becoming a top priority, not just for today, but also for life after the pandemic. Here are four key digital transformation trends to watch in 2021.

1. Blending the Consumer Experience Across Multiple Channels

The pandemic has cast into stark relief the need for people to bank how, where and when they want. As a result, the old barriers between physical and digital are falling away at an accelerated pace.

Right now, financial institutions are navigating the challenges of the pandemic and the abrupt shift to digital. But even when we move beyond COVID-19, the branch will be part of a comprehensive experience in which we're thinking about the consumer rather than the specific channel.

That means, for example, understanding that consumers expect seamless transitions when they start an interaction on their phone at home and want to continue it when they get to the branch. It also means offering digital account opening, digital instant card issuance and all manner of commercial, small-business and consumer lending services that weave effortlessly between physical and digital.

The branch remains fundamental. But creating a comprehensive experience requires finding ways to make the in-person experience a true complement to digital engagement.

As consumer expectations shift in this quickly evolving environment, financial institutions realize that creating a robust digital ecosystem is fast becoming a top priority, not just for today, but also for life after the pandemic.

2. Open Banking and Integration

Open APIs can be the key to delivering smart, secure, agile and relevant experiences whether consumers are buying groceries, using a ride-share, getting paid or redeeming a loyalty voucher.

Open banking extends data and banking as a service to give consumers the ability to move and manage money where, when and how they want. It also can enhance consumer loyalty through personal financial management services or other enriching partnerships.

Enabling consumers to bank the way they want is the priority now and after the pandemic. Open banking can enhance that flexibility and help financial institutions unlock capabilities that lead to richer consumer experiences.

3. Data Insights and Analytics

None of those experiences can happen effectively without the ability to harness the power of data.

Gaining insight from a broad range of data sources is critical to enhancing the consumer experience and providing the most innovative offerings. Tapping into the right data also can help financial institutions across the board, whether it's diving deeper into customer acquisition metrics or getting a real-time view of the organization's liquidity position to manage balance sheets more effectively.

Strong data analytics will continue to be a top priority in the coming year and beyond as financial institutions seek to better understand consumer trends and expectations. That understanding helps heighten engagement with consumers and, in turn, build loyalty.

With the cloud, financial institutions are finding the agility they need built into their platform, allowing them to gain richer insights, support a wider ecosystem and, ultimately, deliver a better digital experience that aligns with their transformation strategies.

4. Building a Foundation in the Cloud

Without the right infrastructure, digital transformation falls short of its potential. Open-banking partnerships, powerful consumer behavior insights and instant transactions from any device all depend on enabling technology.

Expect financial institutions to continue turning to that tech enablement in the cloud. It's the key to being ready for the next decade of evolution in financial services.

With the cloud, financial institutions are finding the agility they need built into their platform, allowing them to gain richer insights, support a wider ecosystem and, ultimately, deliver a better digital experience that aligns with their transformation strategies.

The infrastructure provided by the cloud goes beyond preparing financial institutions for the coming year. It sets them up for whatever digital evolution may come, making sure they are always future-ready.

Preparing for the Next Normal

COVID-19 has accelerated what was a steady march toward digital transformation in financial services. The pandemic also highlighted how quickly consumer preferences and expectations can change.

As financial institutions look to the coming year and beyond, it's that lesson that will resonate. Meeting consumers where they are today is important. Preparing to meet them wherever they choose to be in the future is paramount.