Note form the Publisher: Each year end, consultant giant Jack Henry & Associates releases its list of top trends for banking for the coming year. The firm has over 10,500 financial technology customers nationwide, spanning community financial institutions to multi-billion dollar mid-tier institutions and multi-bank holding companies. Included this year are the topics blockchain, chatbots and APIs.
Top Banking Trends for 2017
- The digital channel will continue its rapid evolution with further advances in user experience, adaptability, functionality and channel integration. The channel will break more geographic boundaries for community and regional institutions.
- Small businesses banking will be a continued focus for digital channels, presenting a way to drive revenue from the self-service revolution. Such solutions should seamlessly address business needs and create added efficiencies.
- The buy button is in high demand. More customers and businesses will prefer to open accounts digitally, pushing financial institutions to offer more efficient onboarding options.
- Chatbots are promising enhanced artificial intelligence (AI) and natural language capabilities in 2017, making the solutions more applicable to a variety of financial services (think collections, customer service and wealth management).
- Digital appointment booking will save time and add convenience to branch meetings, while allowing bankers to be more prepared for each customer. Research has shown that this bridge between digital and in-person banking could increase branch traffic.
- Alternative lenders and bankswill find more ways to collaborate in order to structure mutually beneficial balance sheets. Community banks joining the movement may hope to fund half of small business loans that they previously declined, ultimately growing their portfolios.
- CECL compliance changes will expedite the issue of data integration. The need to integrate data from disparate support systems with core processing systems will have added benefits for banks well beyond 2017.
- Cross-border payments based on blockchain/distributed ledger technology (DLT) will gain momentum in 2017 with multiple implementations taking place across the globe. Other promising use cases include identity management/authentication, micropayments and smart contract functionality.
- APIs will enable more targeted offerings that rely on existing core infrastructures and growing partnerships among fintech leaders. The core systems that focus on ease of integration with third parties and a better user experience stand to gain the most traction. Anticipate analytic offerings to provide new and valued services.
Risk and Security:
- New authentication tools will begin to replace the standard, stagnant password. Institutions are adopting a layered security system with multiple and convenient biometric authentication tools. Expect to see services such as MasterCard Identity Check (“Selfie Pay”) gaining traction as part of a layered security approach.
- Cyber resilience strategies will become a more formal demand fromfederal examination agencies as they increase expectations for banks to mitigate cyberattack reputation damage and financial loss.
- Cloud adoption will continue to grow among banks as a way to provide better security, flexibility, scalability and business resiliency. Cloud services will eventually offer a strong standard for security.