Three Lasting Digital Priorities for Financial Institutions

COVID-19 has had a dramatic impact on the financial services industry, driven by fast changing  consumer habits and expectations. While many of these changes have been underway for some time, the pandemic accelerated many digital trends and put a spotlight on the new ways of conducting personal finances and business banking. As a result, banks and financial institutions have had to radically rethink their models, products, and services to compete with the growing number of new entrants and digital offerings. 

As a leading nearshoring software development partner for dozens of global financial institutions, we have seen these challenges first hand, and are working closely with clients to develop digital solutions to address these massive changes. Financial institutions are building and deploying innovative capabilities across the industry landscape. State-of-the-art technologies for digital bank account openings, credit management, and critical back office functionality are part of the day to day operational framework of today’s most advanced financial organization. At the center of these new technology are three core digital trends:

Full Functionality. Providing more digital capabilities and opportunities to transact remotely has raised consumer expectations. Today, consumers expect to be able to conduct each and every transaction online or over an app as they do in a banking branch. Leading banks have focused on reducing the friction for online and mobile account opening, loan applications, transfer of funds, and other essential interactions. For example, Alelo, a leading Brazilian-based financial services company, recently 

created a user-friendly web platform and integrated mobile app that allows full functionality to users, from  account balances and bank statements to benefits and incentives. These end-to-end development along with “super apps” can provide access to a full suite of digital banking features to customers. The importance of a fully functional digital experience became even more critical during the pandemic. Full access to banking products during the crisis was not only part of the ongoing shift to a more mobile lifestyle, it was a necessity.

Unified User-Experience. Consumers expect to have a connected, holistic and seamless experience across different platforms. With advanced functionality, like drag and drop capabilities and voice commands, all banking interactions should be consistent across desktops, mobile and apps. The goal is to make digital finance  as user-friendly and unified no matter where the transactions occur. Furthermore, a study from ExactTarget found 83% of consumers say a seamless experience across all of their devices is important to them — and this number increases to 87% when considering just those who own both a smartphone or a tablet.  Consumers want intuitive apps that are easy to use on the go and do not take too much time to complete basic transactions. Yet, there are still a large percentage of global consumers who rely on basic cell phones to conduct their banking. Developers need to ensure the services and experiences delivered on high-tech smartphones will also work on basic handsets to meet the needs of all consumers.

Integrations. As digital solutions and offerings grow, so do the number of potential integrations. The average American has 4 credit cards and more than 50% use more than one bank. Having all your financial information connected or in one place in a digital wallet for example, is part of the open banking revolution. It’s a new paradigm where users’ personal and business data can be shared between applications and banks at their request, giving easy access to more financial products. While it’s getting easier to integrate financial products into banking offerings, privacy, security, functionality and back office systems all need to be aligned for these integrations to succeed. At the same time, we’re seeing more global regulatory bodies and government systems want to connect with individual financial institutions as part of their own initiatives. We recently worked with a middle market financial institutional to launch their digital bank. Our teams were responsible for developing the technology for onboarding, personal credit, customer service, and, more recently, PIX - the instant payment system created by Brazil’s Central Bank, which makes it possible to transfer money between people and companies in up to 10 seconds. 

Having digital functionality for all aspects of banking and finance are no longer optional. It’s a top business priority. Whether banks are integrating other financial apps or new governmental systems, back office technologies need to work flawlessly and seamlessly. COVID-19 accelerated the shift to digitization and there are now thousands of global fintechs that offer the latest financial tools and technology. It’s critical for financial institutions to keep pace or risk becoming irrelevant. These three trends - functionality, unified experiences, and integrated offerings - are core to any financial institution’s digital development strategy today.