Impact Study

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Banking as a Service: Predictions for 2023

Four key trends predicted for the digital banking industry in 2022

key trends for the digital banking industry in 2022

The whole idea of banking at your fingertips has introduced a new competitive landscape that has redefined the role of physical branches and ultimately accelerated digital transformation across every aspect of banking. Doing away with legacy practices, shifting from paper-based to digital solutions, moving to a customer-centric approach to fight the competition, the industry has embraced the change and how!

A large majority of companies in the banking and fintech industries in the past couple of years have spent their time digitizing their core products and services to alleviate the losses of in-branch business and future-proofing their organizations by expanding their digital presence.

So, what’s in store for the digital banking industry in 2022? Is this the perfect storm to sail through? Let’s talk about a few trends that will affect the business by large.

The Rise of BaaS

The most exciting trend that we can look forward to in 2022 is Banking-as-a-service (BaaS). This is a great opportunity for existing banks, insurers, and wealth managers to reach a greater number of customers at a lower cost by collaborating with non-financial entities.

BaaS is enabled by the seamless integration of financial services and products into other kinds of customer activities, that also includes non-financial digital platforms. In 2022 BaaS will bring together more digital platforms to reshape economies in most sectors. Also, a BaaS business model is scalable and agile which makes it rightfully suitable for entering new markets and then expanding. With a robust and performance-driven scalable architecture, Appzillon supports secure interactions and high volumes of transactions using a cutting-edge composable architecture that effortlessly integrates with disparate systems to provide an exclusive experience to consumers.

Novel Business Model

Advancements in digital technologies has allowed banks to create increasingly smarter, user-friendly, and customer-centric products and services. To match the increasing demand for personalized and convenient digital experiences, the banking industry will now have to take a customer/client-oriented mobile-first approach to extend their offerings to include financial services at the point of sale. Artificial Intelligence (AI) and Machine Learning (ML) has also witnessed evolution as the crucial enabler in facilitating hassle and risk-free digital transformation.

A multi-experience support platform such as Appzillon uses a single code base for all channels such as mobile, web, kiosk, etc. This approach makes it easy to introduce new features across channels quickly and cost effectively. Customers expect their financial institutions to know, understand, and reward them in real-time, based on their daily lives and changes in their financial profile. With an array of brands vying for the customers’ attention, the differentiator will be based on how digital tools are employed to retain attention span. It makes sense for companies to leverage a repository of customizable digital assets to fast track a digital transformation journey.

Upcycling Physical Branches

The upsurge of digitalization in the banking sector is massive and in 2022 the impact will witness an intensity. Physical branches are being repurposed to cater to a niche vertical of banking aiming at a certain demographic, industry or community. A recent study revealed that physical visits to the banks will drop to less than 35% due to the emergence of digital-only banks. This transformation translates to optimization of operational costs, increased efficiency, and better customer relationship management. Given the state of affairs, incumbents will have to increasingly adopt digital technologies, such as embedded Artificial Intelligence and Machine Learning models that guarantee highly customizable user journeys and reduced efforts in data capture with conversational interfaces. A user-aligned banking solution like Appzillon redefines a paperless, branch experience with its multi-experience faceted approach. Thus, facilitating automation to simplify and streamline processes, decrease costs, and increase internal efficiencies.

Revamping back-office processes

2022 will witness the reinvention of the back-office processes. While the consumer runs after the digital ecosystem, traditional banks are yet to catch up with this trend, resulting in arduous, time-consuming, costly processes and a data-siloed eco-system. By remodelling IT architecture, leveraging data and analytics, and automation with platforms like Appzillon, financial institutions will have smaller units run value-added tasks, such as deal origination, know your customer (KYC) validation, basic collection, and distribution of data, etc leading to seamless operations and accelerated growth.

2022 will see steady growth in the digital banking transformation efforts. There’s a lot of buzz about the often-predicted lesser use of web-based banking services giving way to mobile banking apps. However, in reality, this has been overstated and it has been found that customers are choosing to use both facilities more, with little to separate them in terms of how much their usage has increased. Financial institutions have invested increasing amounts of capital and human resources into data and advanced analytics, innovation, updated technologies, automation, and a reinvented workforce to improve the customer experience while reducing the cost to serve. A perfect example will be the Appzillon Digital Banking platform that features a suite of banking solutions that offers differentiated digital banking experiences for a bank’s customers as well as the staff.

Apps that make smart use of new technologies and tap into trends efficiently attract and retain clients by enhancing the user experience, and making it effortless and innovative are at an all-time rise. If you are interested in building a mobile banking app that integrates cutting-edge mobile banking trends, contact us today.

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