In 2023, banks and other financial organizations will face several difficulties. Innovative new technologies are reshaping the financial services industry, influencing how businesses connect with their customers and use data across departments.
However, the emergence of increased economic volatility endangers entire markets and threatens to increase uncertainty for borrowers and lenders alike. But the development of financial services will go on. Let’s look at the most promising financial trends of 2023, according to GreenSprout, a website that focuses on helping people become financially independent.
Open Banking Will Become More Popular
Statista predicts that between 2020 and 2024, the number of people using open banking services worldwide will increase at a compound annual rate of about 50%, with the European market constituting the most significant sector. It’s not hard to see why this movement is gaining traction, as open data benefits customers and the financial industry.
Financial information is a valuable commodity; by sharing it with third parties, businesses can learn more about their customers’ habits, wants, and, most importantly, needs. As a result, financial institutions may provide a better service to their clients, leading to increased loyalty and repeat business.
AI and Machine Learning Will Become Better
The combination of AI and ML improves the productivity and competitiveness of businesses. GreenSprout noted these tools can quickly and accurately collect, organize, and analyze massive datasets. Instead of spending time and resources manually sifting through data, financial institutions can take action based on these data-driven insights. What we’ve even noticed this year are consumers utilizing services such as ChatGPT to automate tasks and improve output.
Cybersecurity Will Grow
Financial organizations have traditionally relied heavily on strong cybersecurity measures, says GreenSprout. It’s safe to say that these cyber attacks have far-reaching effects on businesses. 42% of organizations report being unable to expand into new channels due to digital theft.
Financial organizations suffer disproportionate losses from cyberattacks. Because of the high value of their client’s financial and personal information (PII), a breach in security could cause the bank to lose a substantial number of customers and a significant amount of income.
Cloud Native Systems
Top banks and other financial institutions still favor cloud-based computing. In 2020, HSBC, for instance, committed to a multiyear agreement with Amazon Web Services in order to migrate their on-premises old systems to Amazon’s cloud. German financial institution Deutsche Bank collaborated with Google to provide a “fully-managed environment for apps” in the cloud.
But what makes the cloud so significant? IBM claims that using cloud-based technologies helps businesses to be more flexible, save money on IT and operational expenses, and give their remote workers the tools they need to be productive.
Labor Helps Businesses
A “material” event is one that “must be explained on financial reports” because of its material financial impact. Four in ten businesses will have trouble maintaining steady operations. To ensure the successful implementation and delivery of their business models, companies will need to shift their focus radically toward adaptability. For instance, 57% of workers say they are not being given the tools they need to provide a high-quality experience for customers by their employer.