In 2023, financial institutions face a challenging business environment and rapid technological disruption. Here is a short summary of ebankIT’s Digital banking trends and predictions for 2023 to help you stay updated with the latest innovations in the fintech sector. In this new and exclusive report, ebankIT has gathered the top main trends that will influence digital banking this year. It will help innovators understand upcoming banking transformations and prepare them to lead the next generation of digitally empowered financial institutions.
Digital banking trends and predictions for 2023
The rapid pace of innovation in fintech and digital banking has created a golden age of choice for consumers, who are becoming more demanding and discerning. Banks and credit unions must keep up with all of these innovations in order to not fall behind and lose customers.
We want to help banks and credit unions anticipate changes, respond to them, and future-proof their business strategy. ebankIT exists to enable financial institutions to reach their full potential by giving their customers a customizable, omnichannel, and humanizing experience. Change is coming - and we’re here to help.
Renato Oliveira, CEO of ebankIT
1. Chatbots are taking over
Chatbots are predicted to play an increasingly important role in digital banking. Millennials and GenZs are customers that are becoming more and more used to talking to machines. A survey found that 40% of internet users prefer interacting with chatbots rather than with customer service agents.
The truth is, chatbots are more efficient and quicker in responding to a customer's problem. They can deliver services around the clock, allowing them to be
accessible when a customer needs them rather than being bound by office hours.
In this modern age, chatbots are the norm and customers expect to be able to speak with banks from anywhere and at any time via their smartphones.
Bank of America is one of the banks that introduced a digital assistant, which is called Erica. It has 24 million users who completed 123 million interactions during the fourth quarter of 2021. Erica has also been trained to recognize “intents,” which means it can understand slang phrases.
In the end, the key to a successful chatbot is personalization which can only be unlocked with data and artificial intelligence.
2. Super apps: hype or hope for digital banking?
A super app offers a multitude of services and products within one single app. This type of app is already popular in the east with "WeChat" and "Alipay" in China. These apps' services include instant messaging, social media, an online marketplace, and much more. Super apps make the life of the user easier, they only need to open one app to perform tasks that once required a dozen of them. "WeChat" is proof of a super app's success with a huge user base of 1.24 billion users.
KPMG has warned that super apps have the ability to "up-end" digital banking and the banking sector in general. If super apps already offer banking, savings, and investment products to customers, they will eliminate the middleman between banks and their clients.
Super apps with the help of open banking, which entails the consent-based exchange of client financial data, will be able to use their extensive databases of client information to offer unique and tailored experiences. Now that they are building their own payment infrastructures, they pose an even bigger risk to financial institutions.
This will enable their users to make everything from making payments to investments, checking their balance, and other operations without having to leave the app.
“As the popularity of super-apps grows, they could become a much bigger source of competition for banks than either neobanks or fintechs. “By keeping users engaged on their platform, they could make it almost impossible for banks to convince customers to leave the super-app in order to use the bank’s standalone digital banking apps.”
Banks have always been a target for hackers and as digital banking keeps expanding, cybersecurity risks will keep growing. It is expected from banks and other financial institutions to protect their user's data as well as they keep their client's money.
In order to address the growing cybersecurity threat, banks should guarantee that their digital platforms can integrate with external cybersecurity systems. Technologies such as machine learning and Artificial Intelligence can be a great help to prevent security breaches. They can for example recognize behavioral patterns that signal the presence of a threat.
Another solution would be for digital banking apps to employ multi-factor authentication and biometric technologies to authenticate users and to adhere to the most recent standards for registration and authentication procedures.
However, cybersecurity can't be defeated with technology alone. Humans are frequently referred to as the weakest link in an organization's defenses. It is important to train people to spot hacking techniques like phishing emails, intended to trick them into disclosing sensitive information, allowing hackers to access a bank's network.