Banking Technology Trends in 2021

The coronavirus pandemic has changed all areas of our lives, and industries were forced to respond to the new needs of society. Many of these needs are related to payments and other banking services. Banking is one of the fundamental areas that affects all the others. Therefore, whatever industry you work with, you should be aware of the top banking technology trends. In this article, we have compiled the main banking tendencies for 2021.

Banking market outlook

According to Deloitte insights, in Q2 2020, the top 100 US banks had provisioned $103.4 billion in net loan losses. COVID-19 pandemic harmed the industry, and it not only stopped the growth of the segment but also had a significant impact on banking technology trends. For example, more banks started to adopt blockchain and artificial intelligence as well as transfer all banking processes online. There are many reasons for this.

First, the COVID-19 pandemic created the conditions of forced and rapid digitalization. People had to stay at home with their smartphones which have become the most reasonable way of using banking services. For many customers, it was the first experience of remote interaction with banks. And they liked it.

Secondly, the COVID-19 pandemic increased people’s confidence in online solutions. During the period of self-isolation, people had enough time to learn mobile banking. Those who didn’t trust online banking were able to discover its benefits and increase their trust in it.

Third, COVID-19 has changed users’ expectations. It became even more important for customers to save 3 major resources: time, effort, and money when getting banking services. And mobile solutions are one of the easiest ways to achieve this. So banks are improving the quality of mobile banking apps as well as expanding their functionality.

So, there is no doubt that the impact of Covid-19 on the banking sector has been enormous. And it has led to the emergence of both new trends in the banking sector and new fintech trends in general, as a result. Let’s take a closer look at the top trends in banking services in 2021.

The rise of neobanks

Neobanks is a new generation of banks that operate completely online. Such banks first appeared in the United Kingdom and then spread all over the world. Basically, neobank is a digital bank, which is only available to customers in a mobile app or on a computer. The main sources of neobanks revenue are transaction fees, subscriptions to premium accounts, and commissions from third-party services.

Unlike traditional banks, neobanks:

• Do not have branches.
• Can work without a banking license (not in all states).
• Work on new technological platforms.
• Optimized for mobile device processes.

Advantages of neobanking for clients:

• Favorable terms of service due to lower costs.
• Transparent terms, no extra hidden fees.
• More flexible underwriting policy.
• Automatic analysis of cash flows.
• Access anywhere and anytime.

The neobank model is convenient for users and profitable for the banks themselves. They have many advantages over traditional banks. What’s more, in the context of constant digitalization, neobanks are becoming indispensable financial assistants. According to Statista, in March 2021 the six app-only digital banks had almost 40 million IOS and Android app downloads combined. The future of neobanks looks promising, so there is no wonder that they are part of banking technology trends.

Mobile banking experience

Today, a mobile device is literally the financial gateway to the world. That’s why banks are abandoning traditional structures and investing more in financial technology to offer personalized interfaces, improved security, and a wider range of services. With mobile banking, people can log into accounts from their phones and access banking services anywhere and anytime. One of the biggest advantages of mobile banking is that it is available 24/7. And since fintech companies and modern banks are using artificial intelligence extensively, banking apps could provide many more services in the future.

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