Top 5 Trends for Lenders in 2019
Posted By: Jennifer Williams / Friday, January 18, 2019
Experts agree on the Top 5 Trends for Lenders to Watch for in 2019.
- Emerging Technology - Artificial Intelligence, big data, and emerging technologies will continue to disrupt industries. In this digital age, technology is bringing convenience, speed, and ease to many industries. Despite doomsday predictions about machines and robots taking over, experts predict that new technology will be used to support, not replace, human employees, allowing them to function at higher levels. Businesses that don't adopt technology and focus on the customer experience, will be left behind by borrowers increasingly seeking convenience and ease. Financial institutions will need to go beyond and use technology to more quickly and efficiently serve customers, save time and money, and attract new clients to help them make more money efficiently. Digital transformation is poised to be explosive in the financial services area this year.
- Radical Change in Lending Models - Traditional lending models are beginning to fade away. The desire for people to bank whenever and wherever it's most convenient poises digital lending to dominate. This is true in personal banking with the proliferation of online lenders and new payment systems as well as for business lending. Business strategies should focus on optimizing technology to secure a competitive advantage.
- Mobile Apps - Everything in financial services is going mobile. This includes third-party financial service providers who are now competing with banks in the financial space. This applies to unconventional lenders, financial managers, or simple financial budgeting apps. The days of a business filling out a PDF or fillable online form for a lender to contact them is quickly becoming obsolete. As we move into 2019, lenders will need to consider how they leverage 3rd -party technology so that businesses can apply for loans from their mobile phones from anywhere so they can better compete.
- Expansion of Open Banking. Banking organizations are being required to enable customers to share their data securely with third parties to power more financial services and increase competition in the industry. By making account and payment data available through secure application programming interfaces (APIs), consumers and businesses have greater freedom and control in how they interact with their financial service providers. With access to open banking, lenders can leverage technology to accelerate innovation and allow for greater access to working capital. What is exciting about open banking is that making consent a central part of open banking strategy places an increased emphasis on consumer value propositions. In other words, if improved value isn’t part of the open banking consumer proposition, the customer will not allow the sharing of their data. Those lenders that provide the best consumer value proposition will be the relationship winners.
- Remote Work to Retain Top Talent - The workplace is poised to get better with businesses changing the way they use space to drive productivity. The economy and tight job market means employees at financial institutions are increasingly demanding flexibility. More entrepreneurs have also been entering the business world with the advent of technology, allowing them the possibility of running a business from anywhere and, in turn, allowing them to pass on this benefit to workers that highly value it. At the same time, a focus on wellness in the workplace is becoming more prevalent, including benefits such as remote work. The behavior of employees will also change as they adapt to the new environment. New tech tools will be used, and employees can work with flexibility and away from the office. Lenders that offer flexibility and remote work will continue to be attractive and retain top talent.
Sources: Forbes, The Financial Brand, Business News Daily, PwC.