When it comes to technology, financial institutions are up to their knees in regulations, security measures and legacy infrastructure, which make them slow to adapt to new trends. The last few years have seen them try to get out of the quagmire by launching new apps, new gadgets and new cross-platform software solutions in a bid to keep customers from jumping ship to more agile or engaging competitors.

In fact, the need for investment has never been greater – according to a Capgemini report, digital laggards in the financial services industry are in danger of losing up to 35% of their total market share to digital pure-plays. So, from upgrading ATMs to give them iPad-esq interfaces, to making mortgage applications possible from a smartphone, we have seen a mass of new innovations from the traditional banks this year.  

However, in 2019 we’ll see a consolidation of the industry’s approach to technology. Instead of doing everything at once, 2019 will be the year when financial institutions hone their technological direction. Many will pick one key area to focus on, and they’ll do it really well. 

Here’s a look at why, and what else is in store for the industry in 2019….

1. Financial institutions will move from trial stages to making tech projects pay. From Natwest’s Cora to the National Bank of Canada’s experiments with blockchain, we have already seen banks implement many different forms of new technology in pilot schemes. In 2019 however, the onus will be put on getting a return on investment, which is likely to involve taking a focused approach to new innovations.
2. Financial institutions could be under pressure to make the most of homegrown talent. With the political climate having the potential to impact the free movement of tech skills across borders, some businesses are predicted to go into ‘supply shock’. They must therefore nurture and develop their own talented employees.
3. The realisation will hit that they need to move at the right pace for customers and staff. While millennial and Gen Z customers might leap towards the latest technology, some baby boomers would rather crawl before they can walk. One of the key challenges for banks in 2019 will therefore be to develop their technology strategy at a rate that suits the multiple demographics within their customer base.
4. Tech investments will stop being gimmicky and start having meaning. We’ve all got excited by the next generation apps and banking assistant robots that have been announced this year. In 2019 banks will concentrate on making their new innovations count from a customer journey point of view.
5. Open banking hasn’t had that much impact yet, but that’s about to change. PSD2 was set to be the game-changer for 2018, with many in the industry seeing the legislation as a threat, as well as an opportunity. In 2019 we can expect the legislation to start to impact consumer trends.
6. New branch formats will pay dividends. Branch formats have been refined over the last few years, with many banks adjusting their portfolios to include flagship stores in high footfall areas, and a consolidated number of smaller stores, supported by transaction-heavy pop up or mobile branches in convenient locations. It has been a time of change and 2019 will see these new branch portfolios mature and get results.
7. Consumers will become more comfortable with banking tech. In 2014, 19% of consumers had biometrics on their smartphones. By 2018, this had risen to 7-in-10. The consumerisation of technology like this makes it much more comfortable for banking customers to use, so we can expect to see a growing amount of technology such as biometrics in banking.
8. Big data and analytics will add value to the customer. As a globe we are creating a mind-blowing 2.5 quintillion bytes of data each day. For banks, the challenge is to put data to work. In 2019, we will start to see banks use data more intelligently across different platforms to improve the customer journey, personalise the experience and predict how the customer will need to interact next.  
9. The demand for ‘as a service’ offerings will continue. The ‘as-a-service’ economy is well underway in the UK, with analysts expecting the XaaS market to grow 38% by 2020. Banks looking to make a better use of their internal teams in a competitive environment can be expected to jump on this trend to boost their internal agility.