Across industries, disruptive technologies like artificial intelligence (AI), machine learning (ML) and blockchain are driving a cashless payment ecosystem forward to offer faster and more secure financial transactions.
With FinTech at the forefront of this recent innovation, here are my five predictions on the horizon for the banking industry and financial institutions in 2021:
1. The global impact of the pandemic will create a hyperdrive to digital banking solutions.
We have yet to see the full damage that the COVID-19 pandemic has caused. So far, every precaution we have taken to stop the spread of COVID from wiping down door handles, wearing masks, sanitizing everything we touch, etc., will not subside any time soon. Further, we are seeing fewer consumers handle actual cash, as it tends to carry the largest pathogens of germs due to the amount of circulation each bill endures through its lifetime. With the COVID-19 pandemic putting digitization into hyperdrive, we will see much greater use of digital banking technologies across channels and outside the brick and mortar, eliminating physical cash reliance.
2. Digital banking standards will emerge to safeguard the use of payment platforms fueled by cutting-edge technologies such as artificial intelligence (AI), machine learning (ML) and Blockchain.
Technologies including AI, ML and Blockchain have been at the forefront of disrupting the banking industry for years. The pandemic has further exposed the holes in the banking industry as they rely heavily on dated legacy systems, leaving them vulnerable to fraud. This will be the year that banks will be forced to implement a standardized body of standardized regulations to regulate the emergence of technologies in digital payments.
3. Autopay systems fueled by AI will increase.
AI has been a gamechanger in the FinTech space. We will see a further shift in the implementation of AI in digital payments to create a neural network that intuitively knows how you want to spend your money before you do. This will only be furthered by geofencing technology, which will track when you enter a store, save a debit/credit card on file for easy autopayment and remove the need for cashiers and point of sale (POS) systems.
4. The underbanked will explode and grow the digital payments economy.
The financial impact of COVID-19 will continue as businesses struggle to remain open and record numbers of US citizens fall further behind on their bills. On top of this, the rising numbers of COVID-19 cases are forcing people to stay in their homes, as they want to avoid a physical branch location. As a result, we will see a massive explosion of the underbanked and the rise of a digital payments economy. This transformation will be a forcing function that will need to remove the high barriers to entry you expect from traditional banking to bring in the underbanked consumer into our economy.
5. A global financial system will arise and begin to transform our banking ecosystem as we know it.
The idea of a global banking system takeover has been underway for quite some time. COVID-19 has further accelerated the creation of a new global banking system that will transform banks into a digital bank platform controlled by a new global currency. For a global currency to do this, it must be a trackable currency to eliminate fraud. This transformation will open new revenue streams, reduce friction and offer consumers new ways to bank.
The rapid digitization of financial services is needed to meet the demands of today’s mobile customers, which includes security with flexibility and the tools to provide cashless payments across platforms. The coming year will also bring forth the standards needed to protect the use of disruptive digital banking solutions and biometric security technology.
About Eric Solis
For more than 15 years, Eric Solis has been a key contributor to the advancement of digital finance, including payments, micro-investing, securities, money transfer systems, transfer agents and record keeping. Today, the founder and CEO of MovoCash, Inc. is combining the best of banking and blockchain through MOVO, a highly-secure payment card platform that empowers customers to instantly send and spend money right from a mobile phone, even without a bank account. An alumnus of Stanford University, Graduate School of Business, Solis held FINRA series 7, 24, 65 and 63 licenses and earned a CFP designation from the College for Financial Planning.