The speed at which the digital revolution is happening is scary. The banking industry is struggling to keep up with the digital innovation.
As far as banking is concerned, the new players are giving tough competition to the traditional banks with digital innovation. However, traditional banks are still dominating the banking sector. To compete with the new entrants, the banks can do plenty of things, including partnering, piloting new solutions, crowd-sourcing and hiring. After all, everyone wants to improve the customer experience and investing more in that is definitely going to be helpful for your bank.
The challenges faced by the banking industry
Banking industry faces several challenges with constantly evolving technology. There are plenty of questions to address here:
- How can legacy banking operations be transformed with the innovations like blockchain and marketplace lending?
- There are so many fintech startups giving tough competition to traditional banking systems. Are they going to replace the traditional banking systems?
- Can fintech players and traditional banking organizations be partners? Or they will compete with each other?
Change is inevitable
None of us have answers to the aforementioned questions. But only one thing we know for sure is the fact that the banking system will not be like what we see today 10 years down the line. For that matter, we can expect to see some considerable differences by 2020 itself. A recent study has revealed that the banking industry is in for a huge transformation in the next couple of years. Both current and future trends will play a big role in shaping up the future banking industry.
What kind of transformation?
Yes, it is an established fact that the banking industry is going to undergo a sea change. Nobody questions that. All of us have only one question – what would be the nature of that transformation? New technology and competitors will play catalysts in changing the face of the banking sector. The changes that we are talking about are going to happen in a really fast manner. Also, one can expect significant changes as well. To Know More About The US Banking Sector, Visit This Page Here.
As we all know, there is friction between traditional banking systems and processes. Moreover, banks are constantly trying to outsmart each other in improving customer experience. That is exactly what attracts new players into the fold. As stated before, there are so many fintech startups are making their presence felt. But they all have to deal with numerous challenges thrown at them, despite having an increased interest from investors.
Let’s take a look at some of the megatrends below. Most of these banks will be forced to focus on an organizational structure that is agile and simple. Banks will be paying more attention on customer experience and brand equity. They will also have to rely on a blockchain-based payment system. Moreover, banks will be given more importance to machine learning. Also, it will become inevitable for the banks to consolidate the lending industry. As we can see, it’s a big deal. Can the banking industry survive amidst these changes? Well, the same study reiterates that the banking industry will emerge stronger. The only one thing which is constant is change, and the banking industry is on the verge of an explosion. The industry cannot survive without adapting to the technological innovation and it is equipped to do it.