Financial industry outlook 2016: Innovation will find its way back
Over the past several years as banks focused on staying in compliance with myriad new regulations, innovation slowed—nearly to a standstill. In 2015, I predicted it would be the year banks took back banking. That was certainly true for our clients. They forged partnerships with companies that have come to be known as disruptors in our industry, gave mobile banking new meaning, and focused on creating a great customer experience.
In 2016 equilibrium will start to take place as the financial industry embraces the tremendous potential technology holds for them and innovation finds its way back.
We are living in a mobile world
Mobile is gaining momentum and providing greater access to the interior of banks. It is no longer simply about checking balances and transferring funds—everything from loan applications and account opening, to remote deposit capture and wealth management is possible. Banks are combining technology with data and service providers to ensure these faceless transactions aren’t fraudulent.
Mobile will continue to make advancements, no doubt. Banks understand the importance of customers being able to conduct their financial activities whenever and wherever they want. Document recognition, image capture, and biometrics are paving the way to greater security and driving mobile capabilities to become more mainstream and user friendly.
Getting back to our roots
Grass roots innovation is something taking hold within banks. The people working in the trenches are bringing their ideas forward as they see what brings value to both customers and their institutions. This is particularly evident with digital banking strategies. Technology is being implemented outside of legacy systems to address the unique requirements of online and mobile banking. As those strategies show positive ROI and low risk exposure, they are introduced to branch processes and across all lines of business.
The ability to securely automate the entire digital transaction, bring in the right data provider at the right time, and change policies quickly all attribute to a great customer experience and better results for the bank.
This grass roots movement will continue to be influential in the coming years, because who knows better than those on the front lines.
What the future holds
Today the industry is abuzz about blockchain. With varying opinions regarding the impact this technology will have on financial institutions, its power can’t be denied. Blockchain is interesting because it can protect anonymity but also exposes with complete transparency where something came from and where it has been. Think about how many things require that level of transparency—especially in financial services.
Our industry has started to think about the exciting implications of its day-to-day use. The authentication of data and its sources can be guaranteed with a blockchain technology; this has the potential to eliminate fraud online by ensuring the legitimacy of each transaction.
What if all the information necessary to originate a mortgage or purchase a car was on the blockchain? Talk about a game changer in efficiency. The time to close on loans would decrease dramatically, because every piece of data you need is right at your fingertips. Blockchain essentially creates a pedigree for anything out there.
Blockchain is definitely one to watch, but not for too long. It will provide a tremendous advantage to the early adopters.
Innovation, alive and well
With the world changing at great velocity, it is critical for banks to keep up. Everything is moving online, with immediacy as the expectation at the point of sale. Whether consumers are retail shopping, connecting with Uber, or opening a bank account—they want seamless, exceptional service.
This is the world that Zoot grew up in; we started by making instant decisions and offering credit at the point of sale. We didn’t stop there. Over the past 25 years we have constantly innovated, looking toward the next decade and beyond.
Our goal is to continue to add transparency for our clients and give them deeper control over their solutions through our tools and services. 2016 holds great things for our industry. As banks gain back their equilibrium, they will settle back into a cadence of innovation. We’re poised and ready for the challenge to help them get there.