Getting Ready: Digital Banking Trends You Should Watch Out For 2023

The world continues to modernize. Traditional banks have been mostly displaced by digital banking, and a simple click can transfer money from one location to another.

The previous years of the pandemic have been deemed transformative when it comes to banking as digitalization took hold of it. It is leading to changes in customer behavior and making banks look more like technology companies. This 2023, it's safe to say that this transformation will continue to accelerate. Therefore, it is essential to reconsider how banking companies will run in the future.

What is Digital Banking?

To put it simply, digital banking refers to the accessibility of online banking services. Digital banking is the term employed to refer to banking that is performed entirely online.

A bank is referred to as a "digital bank" if it provides financial goods and services that are conducted entirely online and/or through electronic channels without having to open a physical branch, sub-branch, or branch-lite unit to do so. Banks compete not only with one another but also with fintech companies and other financial service institutions as digital banking adoption spreads globally.

Lots of people prefer banking online nowadays, especially since the start of the COVID-19 pandemic. Starting with the most obvious reason why—we don't need personal contact. With just a tap on your mobile phone, you can easily transect and have access to your bank finances. There will be no problem accessing your account as long as you have a stable internet connection and the app on your phone, there are no hidden fees when making transactions online, and it is a lot more convenient compared to visiting the bank and getting swamped in the long line just to get to the bank teller. Not to mention, you can monitor your account anytime! Sounds easy, right?

Digital Banking Trends for 2023

The year 2023 has just begun, so now is the ideal moment to learn about the most recent technological trends affecting the banking sector that you should be aware of this year.

The future of digital banking would be promising if companies could gain deep insights into the financial behaviors, requirements, and preferences of their clients. Although trends have changed over the past few years, a common overall theme has been a focus on digital transformation. The current and upcoming trends in the banking business will serve as game changer that unquestionably impacts the standing of the banking sector.

Here are six trends that is predicted to shape the banking industry's digitalization this 2023.

1. Focusing on digitalization.

The modernization of technology is a "forever" process. As digital maturity increases, this trend in digital banking will continue to gather momentum and force many banks to close substantial portions of their branch networks.

When choosing a bank, consumers are increasingly favoring digital options. By adopting digitalization, banks could offer improved customer care through self-service digital channels on mobile and internet banking channels. Customers are interested in what a bank has to offer, but they also favor digital over physical methods—such as online and mobile banking.

2. Clients are prepared for engagements powered by AI and digital technology, but trust is essential.

To improve the customer experience, smart banks are making significant investments in technologies such as conversational messaging, AI, automation, machine learning, and security. 

AI and automation are increasingly commonplace in client interactions and are present across many industries. The financial sector is similar—customers are willing to accept these new experiences if they have faith in their bank, which is hardly surprising. Study shows that customers who trust their bank feel more at ease talking about money on a messaging app than those who don't.

3. The proliferation of chatbots and virtual assistants.

In connection with the trend elaborated above, Natural language processing will become standard in customer interactions by 2023. Although chatbots and virtual assistants are becoming more popular across a variety of industries, banking is where they really shine because of their adaptability.

Chatbots powered by AI will be able to respond to a wide range of inquiries. A chatbot might be developed, for instance, to access a user's financial information and recommend goods that could be suitable for them, such as upgrading their current credit card or starting a new savings account. For more interaction with the customers, banks are more likely to provide chatbots and virtual assistants to help deem their queries and needs.

4. Due to the cost-of-living crisis, banks will update their online banking services.

It's likely that the cost-of-living crisis will have the most impact on customers' banking decisions as 2023 gets going.

Banks are currently preparing for even harsher economic conditions and a potential worldwide recession in 2023, despite the fact that the energy crisis has caused high levels of inflation and prompted people around the world to confront greater costs of living. Banks now feel a genuine sense of urgency to further digitalize their channels and offer new financial services that will better assist customers in coping with the increasing challenges of inflation. In order to gain long-term customer loyalty, banks must provide targeted guidance and solutions to both their top clients and those who are having difficulty.

5. Green banking will keep growing from its seed.

With several banks already pledging to achieve net-zero carbon emissions, the green banking movement has recently gained a lot of momentum. From a technological sustainability standpoint, efforts to reduce digital waste and integrate the circular economy are on track to qualify for the trending list starting in 2023.

In every industry, including banking, sustainability is a key trend. Despite the increasing pressure to solve the climate catastrophe, banks are unable to achieve net zero on their own. Although it is still in its infancy, the movement is here to stay despite growing worries about the expense of living. At the moment, banks are primarily involved in symbolic operations that barely affect the world. These can assist financial institutions in connecting with clients who care about sustainability. Financial institutions that value sustainability will try to address this through a variety of strategies, including consumer education and making sustainable options easier. Banks are beginning to investigate how they may address their ESG targets in a more comprehensive approach that not only covers their own operations but also helps their customers' own decarbonization initiatives in order to fulfill that commitment.

6. Low-code/no-code development platforms for quicker time to market.

As modernization continues to grow and technologies keep getting advanced, slow-moving development projects are now less acceptable this year.

Platforms with no or little code can now facilitate the creation of a variety of fintech products. Additionally, they provide banks and other firms with a "simple" technique to create new digital goods and services without having to shell out a sizable sum of money for pricey application specialists. With no-code/low-code tools making it feasible for banks to produce digital products rapidly and effectively, the banking sector is observing a trend toward faster time to market.

AllEasy: The Emerging E-Wallet App for Filipinos

With their mantra, "Financial and digital inclusion, made all easy", The AllEasy app is one of the promising digital banking/e-wallet service apps that will help provide financial access and bridge the gap between the haves and have-nots of banking.

The mission of AllEasy, Inc., a supplier of Financial Technology (FinTech) solutions, is to improve the lives of all Filipinos by making payments simpler. Filipinos may enjoy easy digital payment processes using the AllEasy e-wallet software, including moving money, paying bills and merchants, and even making safer purchases through Pay on Delivery. With this, you can add, send, and request money anytime, anywhere, and be able to do hassle-free transactions on the go. AllEasy accelerates the transition to a nation where everyone benefits from increasingly affordable digital payment methods.

For more information, you can visit their official website

The Future of Financing with Digital Banking

Digital transformation has been sparked by the epidemic, and every bank is now moving along the street of digital transformation. In 2023, banks will have new chances, and those who miss out on them will be left behind. Banking executives won't be embracing digital banking as an additional consumer channel this year. Deep insights will be pushed down both human and digital channels by connecting them and doing so. The banks that stand out from the competition by developing close relationships with their clients offering dependable guidance and support, and demonstrating a thorough understanding of and concern for each client's financial condition will be the ones that succeed.

Many banks will change into pure technology businesses by 2023, taking advantage of their sizable client bases and distribution networks to provide digital solutions. With these trends listed, you'll now have an idea of what to expect for this year's financial digital banking transformation. If you don't happen to know any of these, you'll be missing out a lot!

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