Top 5 Trends in the Banking Industry and How They Affect You
The banking in the US is undergoing major revolutions. New services and products are continuously shaping the business landscape in the States. Innovations and customers tilting towards fulfilling customer needs drive the leading financial institutions. The organizations are focusing more on digitisation and technological advancements. On the other hand, behavioral changes a creating a new and sophisticated generation of customers with different expectations. The traditional banks are being challenged by the FinTech companies to shift towards automation and work towards customer segmentation. Below are five key trends in the US banking industry that will affect you as a client directly.
More Apps are Being Developed
In the recent times, many banks have moved towards offering more customised application to users. Convenience is the primary driver behind the development of banking apps. The power of banking is with you anywhere anytime. Leading banks in the US are creating additional mobile app features to give clients access to right information and functionality when and where they need it. Upcoming banks targeting millennials provides full mobile banking through their mobile apps. The services being added to the app include cheque deposits, automated savings and unlimited withdrawal of money from the customer’s bank account. The apps can do everything from sending you financial reminders on a daily basis to showing you how many Uber rides you have taken per day.
Recently, the federal Office of the Comptroller of the Currency issued special-purpose bank charters to FinTech companies. This implies that the FinTech companies can now operate as national banks offering limited financial service products to their customers. Institutions that fall under the special-charter umbrella include credit card banks, cash management banks, and trust banks.The FinTech companies are now in good position to create their financial products and offer to their customers taking full advantage of the automation space. Historically, banks have been known to ignore the interest of the customers and concentrate on what is in the industry’s interest. A major shift is due to be experienced if the traditional banks are to remain relevant in the market.
Enhanced Customer Interaction and Delivery of Service
The key point to this is communication. In 2017, banks seem to be shifting towards constant communication with the customers. Banks are explaining how they value their customers and how careful they are with the data you give them. Stiff competition in the banking industry demands that every bank looks for unique ways of attracting more customers. The banks are moving towards higher-touch marketing where they maintain an in-personal touch with the clients. But it is worth noting that more concentration has been geared towards the higher net-worth customers, something that has been captured pretty well by CMC Markets, so if you are the normal type of a customer you may not experience this change. On the more negative side, the increased marketing activities are most likely going to cost you in a number of ways. The funds to drive the marketing strategy will come from the increased fee and decreased service to low-income and low-asset account owners.
For a number of years, cyber security has remained the biggest challenge in the American banking sector. Recent researches show that many companies are taking stringent measures to deal with the issue for once and for all. This is great news to customers who have fallen victim to the cyber bullies in one way or another. Although new threats are still emerging, dealing with the current threats is a key priority to major banks across the country. Banks are giving more attention to cloud based solutions. The other areas of concern include encryption and access management issues. Talks of solutions to key cyber security threats have dominated the banking sector in 2017.
Reduction in the Cost of Foreign Transactions
Banks that issue credit cards to their customers may find ways of doing away with foreign transaction fees. Some popular cards with no fees on foreign transactions already exist in the market. The other banks simply can’t continue imposing such fees to their loyal customers. In comparison, the money that banks earn from such fees is nothing compared to the business they lose. Although many consumers yearn for an easier and convenient digital banking experience, they aren’t happy with the extra fees they have to pay to the banks. Innovations in 2017 are geared towards addressing the real consumer needs and doing away with unnecessary bank charges.