Three digital trends that will shake up the bank in 2022

  • Our banking trends to watch report describes three digital transformations this will upset the bank.
  • Here’s a look at three big trends that will rock the banking industry in the New Year.
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What we noticed: Insider Intelligence Banking Trends To Watch 2022 Report identifiesthree key areas of digital transformation that will further disrupt the

banking industry

in the new year.

providers that U.S. bank users would trust

Insider Information

What 2021 developments portend 2022 changes? The incumbent operators and digital challengers have focused on improving personalized offers for their customers.

Meanwhile, big tech companies have gained a foothold in integrated finance through payments and could potentially venture into banking.

Finally, Western financial institutions are poised to offer consumers super apps like those popularized in the Asia-Pacific region, which will offer a wider product line than was previously available.

What does this mean for 2022? Here’s a look at three big trends that will rock the banking industry in the New Year:

Big tech companies have used integrated finance, via payments, as an “access” to financial services. This gateway allows non-financial companies to offer financial products and services to their own clients.

  • Tech companies are now well established in payments: Apple Pay and Google Pay have respective market shares of 43.4% and 25.0% in proximity mobile payments, a market of nearly $ 247 billion.
  • Venture capital firms invested nearly three times as much in embedded finance companies in 2021 than in 2020, per PitchBook.
  • Big tech companies are also expected to show continued interest in banking services, despite Google’s decision to unplug Plex. However, they will likely attempt to do so by partnering with established financial institutions (FIs).

Meanwhile, hyper-personalization is gaining ground in banking and wealth management. This includes:

  • The emergence of niche FIs like Daylight, which caters to LGBT clients.
  • Incumbents operating AI-based services to deliver tailored experiences to their customers. Examples include Erica from Bank of America and digital assistant from Chase.
  • Unmet demand among aspiring affluent consumers. They are at an impasse: their financial needs must be met, but they have not accumulated enough funds to work with advisers.

Finally, Western consumers are getting closer to the accumulation of super apps, which are digital platforms that conveniently bundle a wide range of services.

  • This operating model is already available in the Asia-Pacific region through the companies Ant Group and Tencent.
  • Super apps allow users to avoid decision-making overhead from separately available services. A Deloitte study for the United States found that about a third of consumers feel overwhelmed by the amount of options available to them.
  • PayPal and Revolut are among the most likely to roll out super apps in 2022 that will break through with consumers, but they’ll need to add even more functionality if they want their products to reach as far as their Asian counterparts. Another great potential app to watch out for is Block’s Cash App Pay.

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