David Morey 
Doesn’t the financial services landscape seem a bit unsteady? Years of global upheaval have left financial institutes with various challenges and an uncertain future. Today’s high-interest rates, coupled with soaring inflation tightening the economic environment, make 2023 a tough year.
In response, financial institutes, including credit unions, wealth management firms, and banks, focus on revenue accelerations. They’re cutting back on costs to maintain economic competitiveness while strengthening their security and compliance. However, this alone won’t be enough to thrive in today’s day and time.
Furthermore, the adoption of digital technologies like cloud services and phishing simulation has also gained momentum in the financial services industry. After all, cash transactions and ATM withdrawals are becoming less common. People prefer using smartphones for all financial transactions, so it’s time to move towards a contactless financial services landscape.
If you want to know what things will shape this industry’s future, keep reading. Here we have outlined six financial services trends to watch in 2023.
1. Emergence of Open Banking
In 2023, global open banking customers have significantly increased, especially in European markets, primarily because people understand how open data benefits financial players. By granting access to this data, organizations can determine how consumers behave and what they want. As a result, financial institutes can offer in-demand services with a superior customer experience.
Moreover, open banking can enable account aggregation, presenting a single view of accounts across different banks. Likewise, financial management tools use analytics to identify spending patterns and budgets accurately.
Before you hop onto these trends, ensure you’re well-acquainted with the finance world. As a finance professional or aspirant, you can network with industry experts, enroll in advanced finance-related courses, or opt for a master’s program. Nowadays, MBA in finance online programs are available for working professionals seeking to enhance their academic credentials to accelerate career advancement. By pursuing an MBA in finance online, you will learn about financial regulations, new evolutions in the industry, and financial management. This way, you’ll be fully equipped to embrace the changes and adopt recent trends in the financial services industry.
2. Mainstream AI Services
The vast advantages of artificial intelligence and machine learning tools are incomparable. They are making organizations more efficient, productive, and intuitive. And soon enough, we’ll witness these technologies making their mark in the financial services industry.
AI-enabled tools can gather, sort, and analyze enormous datasets within minutes. Hence, financial institutes can use these datasets to get insights instead of digging into data manually. Further, low-code/no-code AI can also be equally valuable. It will enable accounts to build applications without any coding knowledge. They can design customized software and applications that best fit their organizational demands.
In short, AI and ML will lead to more accuracy and reduced errors as most tasks will get automated. Thus, you can expect these technologies to grow in importance moving forward.
3. Increased Focus on Compliance
Recently, there has been much news about financial institutions getting fined due to non-compliance with regulatory requirements. The rising regulatory and reporting standards have started to put pressure on the financial services industry. They strive to achieve compliance while managing risks across all touchpoints. In addition, using connected devices and a remote workforce has put financial institutes at a greater data security risk. As a result, this industry is concentrating on compliance.
Accountants can leverage intelligent software solutions well-versed in changing international financial reporting standards. They can record all transactions as per the regulatory accounting body, closing doors for mistakes and ensuring compliance. In addition, they can also prepare financial statements per the approved international accounting standard (IAS-1). These measures will ensure your books are up to date with regulatory requirements.
4. Rise of Blockchain Technology
As we notice cryptocurrencies becoming more prominent in the financial services industry, why not consider them a new medium of exchange? Countries like El Salvador have already accepted Bitcoin as a legal tender, increasing its popularity. However, crypto relies on blockchain technology, making blockchain adoption vital. Besides facilitating crypto transactions, it offers a highly secure decentralized ledger. That means it isn’t regularized or controlled by any regulatory or governing body.
Blockchain technology will assist in the following:
- Help businesses streamline their invoicing process
- Enable companies to access cash without waiting for customers to pay for products and services
- Companies can borrow money directly from lenders, eliminating the need for intermediaries
- Resolve all pressing issues while speeding up mundane processes and creating a streamlined network.
5. Digital Transformation on The Cloud
Believe it or not, cloud computing has become an essential component of modern-day banking. It focuses on the methods and techniques used to perform computing. Many finance experts also see this as an entry point for progressive ideas, processes, and automation. So, why doesn’t the financial services industry enjoy its benefits?
Bankers, credit unions, and finance professionals can become customer-centric with the help of cloud computing. It enables them to store data on cloud servers while driving rich insights. That way, you can look into consumers’ patterns and interests.
Similarly, cloud computing can also be useful for wealth management since it depends on resource sharing and effective communication. Cloud enables users to share information, fostering collaboration. If you don’t know much about cloud technology, start looking and take advantage of this forum to gain a competitive edge.
6. Need For Cybersecurity
Security has always been a topic of concern for financial institutes, especially with an increased number of data breaches. After all, cyberattacks can be damaging to financial institutions. They have customers’ financial records, which could be invaluable for hackers. Hence, it is time to prioritize cybersecurity by optimizing internal processes.
Soon enough, a suite of tools and features will be designed to mitigate potential risks. Likewise, financial institutes are installing safety protocols like multi-factor authentication and end-to-end encrypted servers. It will ensure that all digital channels comprising sensitive information and consumer data remain secure. Lastly, the financial services industry is adopting new practices for storing data, documents, and critical interactions to combat all threats of cyberattacks.
Final Thoughts
The financial services sector has become famous for its resilience and adaptability in tackling unprecedented uncertainty. The industry has also evolved with new trends and service offerings, but there is a long way to go, especially with high-interest rates. It allows the financial services industry to boost revenue, increase margins, and expand globally. After all, 2023 promises as the year when this industry will thrive and regain its position.
