Financial services are one of the oldest industries in the economy today. This poses both benefits and drawbacks in the new normal. On the one hand, they have tradition and a wealth of experience to draw from to sustain their operations, on the other hand, these same things that stabilise them serve to slow them down and prevent them from competing with emerging companies who are more adaptive and agile.
With the changing needs of consumers and more Gen Z entering the market, here are some key developments to expect in the financial services industry in the new normal.
One of the most rapid developments in the financial services industry is digitalisation. More and more companies are incorporating emerging technologies to optimise operations and services delivered to clients for a better customer experience.
With the pandemic hastening the need for touch-less transactions, there has been a massive reduction in bank branches and a huge shift towards online banking. Banks are now investing heavily in self-service mobile applications and online banking to offer more targeted financial services to certain demographics.
Another trend in the financial services industry is the growing popularity of personalisation. With more Gen Z consumers entering the market, there’s been a greater emphasis on tailoring services to the needs of the consumer as opposed to offering them cookie-cutter packaged services.
Since the pandemic, the needs of consumers have become increasingly diverse as well and the demand for flexibility has also risen. Whether banks or fin-tech companies are able to adapt and accommodate consumers’ changing needs will determine their competitive advantage moving forward.
3. User Experience
The way to retain customers in the new normal will depend largely on relationship building and how well companies are able to protect their relationship with their customers. More than just having a one and done relationship, banks should extend their offerings to satisfy every service a customer consumes. This allows them to build stronger relationship and improve user experience.
With digital technology forever changing the banking and financial industry, there will also be a continuous movement towards user experience. Automation is not enough to differentiate a business from competitors in the fintech industry; one needs to incorporate human-centric interfaces and designs to more effectively satisfy customers’ changing needs.
4. Internationalisation And Outsourcing
As flexible work becomes the new normal, the geological barriers that used to prevent workers from being employed by foreign companies have become less relevant. With many companies migrating operations to online platforms, globalisation has become more prevalent and the same thing is experienced by the financial services industry.
With many companies and startups outsourcing their services nowadays, there’s been an increase in internalisation across borders even during the 2020 recession. According to WTO, there has been persistent international trade despite the drop in GDP; this can be attributed to the varying effectiveness of national response to contain the pandemic. Some companies relied heavily on outsourcing vital food and medical supplies to sustain local demand when there’s insufficient supply due to lockdown protocols.
5. Blockchain & Cryptocurrencies
As technology grows more advanced, companies in the financial services industry have to rethink the way they perceive money and transactions.
Blockchain is shaking up the financial services industry. With blockchain, financial services can enjoy tighter security, improved efficiency, and enhanced customer satisfaction. It will also save financial companies a lot of money by eliminating the need for infrastructure alone.
Blockchain also makes shared ledgers possible. This will allow financial companies to more easily share information to speed up financial transactions in a way that has never been possible before.
Similarly, cryptocurrency is disrupting the way we perceive money. Transacting with physical cash rapidly decreased due to Covid-19. This, along with the growing popularity of cryptocurrency, is questioning the relevance of physical cash today. It also forces people and financial companies to reconsider the value of assets. With more people using cryptocurrency and bypassing banks, many traditional financial services companies are going to lose valuable revenue sources.
The challenge is for older financial services companies to adapt to these changes and remain agile whereas more advanced fin-tech companies have to compete with the terms and conditions older, more financially secure, financial companies can provide.
Office Spaces for Financial Services
Technology is disrupting the financial services industry. With the changing needs of the consumers, financial services companies are pressed to remain competitive by adapting user-centric digitalisation and automation.
Bank branches are no longer as relevant today; providing access to more consumers and targeting their specific needs requires a different approach, one that necessitates financial services companies to work in backend developments and enhancing their operations for the best customer experience.
Large-scale banking branches will give way to private offices, enterprise offices, and even serviced offices. If you’re in the financial services industry and are looking to relocate or downsize your office space, let us know your requirements! We will help you shortlist and negotiate private offices, enterprise offices, and serviced offices with the best deal possible!
Chief Executive Officer, OSDORO
Bachelor of Applied Finance and Bachelor of Laws, Sydney, Australia.
David has been in real estate business since 2002 and has a passion for South East Asian cross border cooperation.
As an entrepreneur, David has won multiple tech industry awards, including 2019 for Best AI Startup GITEX awards, 2019 Best AI Technology Accathon Capital USA and recipient of the Wharton Innovation Fund Grant. His last startup, Woveon, was a New York VC backed AI enterprise business intelligence company that worked on customer data stitching and analytics of billions of conversations.
David is also the recipient of state and national Australia technology prizes including the PWC Innovation Award and Intel Enterprise Technology awards.