From crypto to AI, the world of finance is changing faster than ever.
And financial services (like banks, insurance, and money management) are scrambling to keep up.
Many of these new trends come on the back of changing technology. While others are the result of a renewed focus on the customer.
In this report we’ll cover the top 8 financial trends to know:
1. Financial Services Leverage Generative AI Solutions
Image Credit : Google
Searches for “AI in finance are up 525% over the past 24 months.
Large language models (including ChatGPT) have the potential to disrupt nearly every industry.
And the financial services space is no exception.
For example, Zest AI reports that AI helped a US auto lender reduce costs by nearly 25%.
2. The Finance Industry Embraces Blockchain
Image Credit : Google
Search interest in “blockchain” has risen by 550% in 10 years.
For years, blockchain technology has been synonymous with cryptocurrency.
However, the technology is starting to become more integrated with existing financial systems.
For example, using blockchain can allow banks to conduct cheaper, more efficient transactions while maintaining tight security.
It can also be used to handle peer-to-peer lending, an industry that could see a growth of up to $150 billion by 2025.
More banks are transitioning to cloud-based banking in 2024, and blockchain will no doubt play a role in this.
3. More People Use Personal Finance Apps
Image Credit : Google
According to one report, 489k personal finance apps are downloaded every second.
That equates to around 250 billion total downloads per year.
Stats around the current popularity of finance mobile apps.
These apps not only help people manage their money, but they offer ways to invest in stocks and crypto.
It’s not just the ability to manage your money remotely that’s attracting people, either. People specifically like having the power to run their financial world (literally) in the palm of their hand.
4. More Consumers Get Their Money Professionally Managed
Image Credit : Google
A new kind of wealth manager is quickly becoming the de facto money manager for many consumers: RIA.
A Registered Investment Adviser (RIA) is a firm that is regulated by the Securities and Exchange Commission and specializes in giving financial advice and managing investments.
Compared to typical broker-dealers, RIA’s have what is known as a fiduciary duty to their clients.
This means that they are required to put their client’s interests before their own when making financial decisions.
This kind of high-touch and client-focused model is gaining traction in the US.
According to the latest data, investment advisers manage $114.1 trillion in assets for 61.9 million clients each year.
In addition, there are now just over 32,000 RIAs nationwide.
5. Loyalty Programs Drive Repeat Business
Image Credit : Google
We’re seeing an uptick in loyalty programs in the finance world.
Loyalty programs have long been a popular way to keep customers coming back, but they’re usually offered in retail and the food industry.
Now, loyalty programs are practically mandatory, even in the financial services industry. Many believe that they’re only going to get bigger, better, and more competitive.
Most customers, (80% of millennials and 68% of non-millennials) would be willing to sign up for a premium loyalty program offered by their favorite brands.
6. Banks Further Embrace The Cloud
Image Credit : Google
Banks were already gravitating towards the cloud pre-pandemic, but the pandemic really sped things up.
The banking industry’s move to the cloud provides just that.
Market research company IDC estimates that global spending on cloud services will surpass $1.3 trillion by 2025, just a year or so away.
Banks and credit unions will be a part of that, with heavy hitters like JPMorgan Chase and Arvest Bank already converting part of their core systems to a cloud-native platform.
Jim Marous of The Financial Brand believes that cloud banking is the future, citing the fact that IBM has developed cloud solutions specifically for the financial industry.
Read also : Best Auto Finance News Blogs to Follow Right Now
Read also : 7 Best Asset-Based Finance Companies To Consider