- Keeping an eye on our banking trends Report outlines three digital transformations that will turn banking upside down.
- Here’s a look at three big trends that will rock banking in the new year.
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What we noticed: Insider Intelligence’s “Banking Trends to Watch in 2022” report identifies three key areas of digital transformation that the
in the new year.
Which developments in 2021 indicate changes in 2022? Both established companies and digital challengers have made it their business to improve personalized offers for their customers.
Meanwhile, big tech companies have gained a foothold through embedded finance payments and could potentially venture into banking.
Ultimately, western financial institutions are ready to offer consumers super apps like those popular in the Asia-Pacific region and which offer a wider range of products than before.
What does that mean for 2022? Here’s a look at three big trends that will shake banking in the new year:
Large tech companies have used embedded finance via payments as a “gateway” to financial services. This access enables non-financial companies to offer financial products and services to their own customers.
- Tech companies are well established in payments today: Apple Pay and Google Pay have market shares of 43.4% and 25.0% respectively in mobile proximity payments, a market of nearly $ 247 billion.
- According to PitchBook, venture capital firms invested almost three times more money in embedded finance companies in 2021 than in 2020.
- Big tech companies are also expected to continue showing interest in banking – despite Google’s decision to pull the plug on Plex. However, you will likely try to do this by partnering with established financial institutions (FIs).
Meanwhile, hyper-personalization is gaining traction in banking and wealth management. This contains:
- The emergence of niche FIs like Daylight targeting LGBT customers.
- The established companies operate AI-supported services in order to offer their customers tailored experiences. Examples are Erica from Bank of America and the Digital Assistant from Chase.
- Unmet demand from the emerging, affluent consumer group. You are in a bind: your financial needs need to be met, but you haven’t raised enough money to work with advisors.
Ultimately, western consumers are approaching the accumulation of super apps, i.e. digital platforms that conveniently bundle a wide range of services.
- This operating model is already available in the Asia-Pacific region through Ant Group and Tencent.
- Super apps enable people to avoid decision-making overload through separately available services. A Deloitte study for the US found that around a third of consumers feel overwhelmed by the amount of options available to them.
- PayPal and Revolut are some of the most likely super-apps to hit the market in 2022, but they need to add more features if they want their products to be as extensive as their Asian counterparts. Block’s Cash App Pay is another potential super app to look out for.
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