Both personal finance and business finance is changing dramatically with the introductions of new technologies and businesses entering the market looking to revolutionise the space. While the traditional payday loans bad credit direct lender is still in high demand, the finance industry as a whole is likely to see a whole wealth of new changes over the next decade. Here, we’re taking a look at some of the essentials that we believe will make up the finance industry over the next 10 years.
Increased Use of AI
Artificial intelligence (AI) has consistently shown a lot of potential and while some financial services have been using this on a low level, the potential for artificial intelligence has only continued to grow. Some use cases for AI include helping to drive really established processes and increase speed across a business. Some core examples include improvements in MIFID-II reporting, better detection of fraud, and better understanding of consumer needs through NLP (natural language processing). As the world has become far more digital, at a much faster rate than expected due to the COVID-19 pandemic, AI could help to provide real customer personalisation which consumers are demanding more and more of. Ultimately the use of AI can help to develop and nurture mutually beneficial relationships while heightening the customer experience long-term.
Non-fungible tokens, more commonly known as NFT’s, are a cryptographic token record on a blockchain which equates to a digital or physical asset. These assets can be sold or traded and transferred on the blockchain by the owner of the asset. These assets are already being traded frequently across the web, but over the next decade we expect to see more real-world attribution for these digital tokens. Artwork and real-estate items are already being represented by NFTs with the aim to reduce the possibility of fraud and make the sales and buying process even more efficient. Some other real-world applications that we could see in the next 10 years include a role in license records and vehicle papers. The gaming, music and art industries are likely to be the most disrupted by the use of NFTs as well as businesses looking to create a revenue stream through the selling of NFTs. Alongside this, more real-life application for bitcoin and other cryptocurrencies is likely to take off further as a decentralised form of payment.
It’s projected that 70% of financial institutions will be adopting some form of open banking by 2023, the next decade will likely see that extend to 100%. Open banking allows for money to be moved and managed in a highly secure way, while giving customers stronger influence and control. Open banking was introduced to help financial institutions to provide innovative services to their consumers, giving them more choice. We expect to see this grow further over the next decade, offering more personalisation to customers.
Data is growing at an unprecedented rate, and the management of this data in an effective and integrated way is imperative. With more laws and regulations being introduced around data privacy and protection, the growth poses a major challenge for financial institutions and teams. Introducing data alignment strategies as part of data management and integrating more agile, technology-led processes to further automate and manage this effectively will be imperative over the next 10 years. Of course, data privacy and customer information protection will need to continue to be top priority, as well as ensuring data quality and consistency long-term.
Without close co-operation and collaboration over the next 10 years, many financial institutions may quickly become unstuck. The market is becoming ever saturated with more regulators, banks, fintech companies and big techs entering the market. We have seen some partnerships form as a direct result to tackle this, and we expect to see further collaboration between businesses in the industry to force their way to leadership in the industry.
Image by Firmbee from Pixabay