The Top 6 Priorities for Financial Institutions in 2024
Having just entered 2024, the financial industry is ready for significant transformations and innovations, although there will be many challenges ahead. From increasing cybersecurity threats and fraud to the search for new accountholders and an uncertain economy, financial institutions must navigate complex waters to prioritize their business’s success and maintain a competitive edge in the industry.
Time is of the essence as new fintech companies and online-only banks are trying to take away market share from traditional financial institutions. We outline the key priorities that financial institutions should keep in mind as they tackle the challenges of 2024.
Staying Ahead Of Competition
Remaining competitive is a necessity for financial institutions to stay successful. The industry frequently shifts due to technological progress, evolving customer expectations, and regulatory shifts.
While the largest financial institutions have the financial means to implement a range of the latest tools, this doesn’t mean that smaller ones need to be left behind. They can still compete effectively by focusing on niche areas where they aim to excel.
For example a financial institution known for their customer service can focus their budgeting efforts on investing into initiatives that enhance the financial experience for their accountholders, fostering loyalty.
To gain a competitive advantage, financial institutions should deeply understand their accountholders’ pain points and try to resolve them. It is also important to note that what works today may not work tomorrow, so financial institutions should always think of new ways to stay relevant in the minds of their accountholders.
Consumers demand digital experiences that are not only simple and convenient but also rich with data and tailored to their preferences.
This demand introduces a challenging landscape where individuals can easily move their “financial lives” to businesses offering ultra-modern digital solutions, posing a threat to more traditional financial institutions and a need to implement cutting-edge innovations as fast as possible.
Attracting Elusive Customer Segments
It’s interesting to note that only 4% of total credit union members are Gen Z. The common thread among the younger generation is that there is a preference for seamless integration into their daily life.
The financial institution should be able to provide a solution that focuses on accessibility, allowing users to easily navigate and view their financial information. The key lies in adopting a user interface that eliminates the stress associated with finance, recognizing the anxiety many people feel when dealing with financial matters.
While the younger generation leans toward digital transactions, there’s still a desire for a human touch. Completely automated systems with chatbots are usually met with disappointment and a complete shift to digital transactions doesn’t align with their preferences.
Interestingly, Gen Z holds the belief that physical branches remain necessary for a satisfactory banking experience. Financial Institutions that can balance strong technology with an amazing in person banking experience will be sure to succeed at attracting younger generations in the future.
Strengthening Accountholder Relationships with Hyper-Personalized Experiences
Accountholder focus for financial institutions cannot be overstated, especially in an era where expectations are growing and changing financial institutions is not particularly challenging in most cases.
Financial Institutions should place the needs of their customer at the center of their operations. This doesn’t mean just giving them an easy to use digital platform. Financial institutions should dig deeper and understand their customers’ financial necessities, behaviors and goals. This can be done by creating personalized solutions that resonate with their accountholders.
For example, here at Tyfone we have a product called Skip-A -Pay that lets accountholders automatically skip loan payments from their home without repercussions on their credit score.
62% of people in the US are living paycheck to paycheck. Adopting this feature conveys a powerful message to accountholders that the financial institution will be there for them in their time of need and provide critical financial relief. It also avoids the discomfort of having to physically enter a branch to skip loans. This strengthens the relationship between the financial institution and their accountholders while offering them a practical way to manage their financial obligations more effectively.
Customer centric financial institutions also actively seek customer feedback, understanding their pain points, and using this information to refine and improve products and services continually.
Achieving a satisfying digital banking experience on a large scale necessitates the adoption of modern technology. Modern technology not only facilitates the differentiation of banking services but also enables institutions to offer tailored solutions that align with the diverse financial needs of their accountholders.
By embracing cutting-edge technology, financial institutions can provide intuitive solutions that enhance the overall digital banking experience.
In other words, integrating modern technology into financial institutions not only helps them scale quicker but also helps them increase customer satisfaction and attract new accountholders.
Investing In Innovative Technologies
“Financial institutions must be able to deliver an easy to navigate, a seamless digital platform that goes far beyond a miniaturized online banking offering.”
– Jim Marous
The Financial Brand &
Banking Transformed Podcast
Technology investments serve as a competitive advantage for financial institutions and ensure they remain attractive to accountholders.
The adoption of modern technologies not only enhances operational efficiency but also ensures a seamless and secure experience for accountholders.
Moreover, technological investments play a crucial role in fortifying cybersecurity measures, safeguarding sensitive customer data and maintaining trust in an era where cyber threats are increasing.
Last but not least, it’s important to acknowledge how technology investments empower financial institutions to not only meet but exceed evolving accountholder expectations.
The modern financial landscape demands seamless digital experiences, personalized services, and real-time access to financial data. Institutions that strategically invest in user-friendly interfaces and digital solutions go beyond enhancing customer satisfaction; they create long lasting loyalty with their accountholders.
In the realm of digital banking, Omnichannel banking has emerged as a highly popular strategy among financial institutions. This approach seeks to provide a streamlined experience across both digital and physical channels without any delays. While the concept of omnichannel has been in existence for a long period, it is only now, with advancements in technology, that financial institutions can truly deliver on this promise.
Omnichannel banking stands out as a customer-centric initiative, putting the accountholders’ needs in first place. This approach enables financial institutions to gain a deeper understanding of accountholders’ goals, providing them with the flexibility they seek when conducting financial transactions. By aligning their services with the preferences and expectations of accountholders, financial institutions not only stay competitive but also contribute to a more efficient banking experience.
Our nFinia digital banking platform delivers a consistent and familiar user experience across every screen big or small. Our solution allows financial institutions to deliver a robust and secure digital banking experience to their accountholders.
If you are looking for a digital banking platform to delight and impress your accountholders, we are the right partner for you.
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Focusing On Security And Fraud Prevention
Network Security:
Network security plays a pivotal role in protecting sensitive data, maintaining accountholder trust, and ensuring uninterrupted operations. A breach in network security not only jeopardizes this sensitive data but also exposes institutions to reputational damage and financial losses.
Effective network security measures, encompassing firewalls, intrusion detection systems, access controls, and encryption protocols, create a secure defense against cybercriminals seeking unauthorized access.
Beyond protecting assets and information, robust network security contributes to compliance with stringent regulatory standards, leading to a safe environment that aligns with industry best practices.
Artificial intelligence:
AI-powered fraud monitoring systems excel at processing vast amounts of data. These systems operate in real-time, swiftly identifying fraudulent activities. With AI systems in place, financial institutions are able to seamlessly adjust their fraud management approach in response to evolving threats. Moreover, AI delivers much more accuracy compared to manual fraud detection systems.
Biometric Identification:
This technology consists in capturing biometric data from a person for authentication purposes. It can be a photo of their face, a record of their voice, or an image of their fingerprint.
The rising popularity of biometric identification within financial institutions stems from its difficulty to fake or steal. Although cybercriminals may attempt to navigate around this technology, its complexity poses a significantly greater challenge compared to traditional credit card and identity theft methods.
For this reason, it is advisable for financial institutions to embrace these advanced technologies as part of their controls and security measures, securing the financial landscape for their accountholders.
Adopting AI Solutions
In 2024, the role of Artificial Intelligence (AI) will reach unprecedented heights. AI has recently emerged as a driving force, reshaping traditional processes and offering new opportunities for financial institutions to thrive in a competitive environment.
One of the main benefits of AI lies in its ability to raise operational efficiency. Through automation and intelligent workflows, AI can be harnessed to eliminate time consuming and manual tasks. Operational efficiency not only reduces costs but also lets institutions allocate resources to more critical tasks.
AI’s strength in predictive analytics is also very important for financial institutions as it helps them understand their accountholders’ needs better and predict their behavior. The ability to predict through data helps financial institutions identify emerging market trends and mitigate risks, providing an advantage against competitors.
Last but not least, AI vastly enhances the accountholder experience.Through machine learning, financial institutions are able to provide solutions and services that cater to specific individual needs, leading to more customer satisfaction and loyalty towards the financial institution.
The Time To Act Is Now
The impact of institutions acting sooner rather than later to invest in better technology influences their competitiveness, operational efficiency, and overall durability in the world of finance.
Financial institutions that proactively invest in better technology establish themselves as leaders in innovation and reliability instead of followers. This reputation not only attracts a broader customer base, but also positions the institution favorably in the eyes of regulators and stakeholders.
In the grand scheme of things, using outdated tech is actually a hindrance and leads to higher costs than adopting modern innovations.
You may now ask yourselves why the urgency of upgrading your technology? Below you will find ways you and your accountholders can benefit from adopting modern solutions:
Your staff can spend more time focusing on customer service and critical tasks instead of navigating hard to use systems.
Outdated technology means you are less competitive in the eyes of accountholders and they will be more prone to switch over to another financial institution. Modern solutions give financial institutions a competitive edge. It also levels the playing field for smaller institutions that may be worried about taking on the “major players”.
Clunky digital banking platforms frustrate the end user and that can reflect in how you are rated, word of mouth and how many accountholders want to choose you as their primary financial institution. Modern solutions delight the customers and make their financial lives easier.
You can protect yourself better in regards to security threats and fraud with modern technology. Outdated hardware and software pose a significant security risk due to their lack of relevant updates and patches, leaving systems vulnerable to cyber threats. Financial institutions compromising on technology updates risk substantial losses in terms of security, brand reputation, accountability and financial loss. The consequences of bad security far outweigh the benefits, meaning this should be a priority for financial institutions.
Your financial institution will be able to adapt to the always shifting fintech world. SAAS solutions are by nature flexible and help financial institutions react to emerging trends.
In conclusion, the impacts of financial institutions acting sooner rather than later to invest in better technology are substantial.
Institutions that recognize the urgency of technological evolution are better equipped to handle the complexities of the financial landscape, setting the stage for ongoing growth success.
