Over eighty percent of CEOs in the banking industry are concerned about the speed of technological change.
That’s more leaders than in any other industry sector.
And honestly, we really can’t blame them!
Recently-rapid technological advancements are hitting the financial services industry with a vengeance.
In the not-so-distant past, it was pretty tough to break into the financial industry. Established institutions had advantages in size, compliance systems to help manage what can seem like insurmountable regulations, and of course client bases large enough to keep them afloat even through tough economic times.
But now that fast-moving companies, start-ups, and other disruptors are enabled to break into the industry thanks to technology—one of the greatest equalizers—they’re zeroing in on some of the most profitable areas of financial services. And they’re not leaving any prisoners.
Want to run with the leaders of the pack? Then stick with us as we examine three very different financial organizations that are influencing the future of financial services—and the tech they’re using to do it.
Innovator #1: Ally Bank Anticipates Customer Needs to Deliver Modern, Personalized Experiences
Visit Ally Bank’s mobile app and you’re likely to interact with Ally Assist—a feature that the bank calls a “virtual assistant” that uses data from a customer’s accounts and transactions to deliver automated, relevant information including reminders about an upcoming payment, alerts about potential issues such as a duplicate charge, notifications about a recent deposit, and even proactive financial recommendations.
In addition, Ally Assist can even respond to customer requests (which can be typed or spoken—bonus points!) instantly and with their specific financial situation in mind.
So what technology is it that enables Ally Bank to provide its customers with what feels like their own personal customer service agent that they can carry around in their pocket 24/7? It’s all powered by artificial intelligence—an increasingly popular and necessary trend among competitive financial organizations.
Key Technology: Artificial Intelligence
AI includes several different technologies, such as machine learning (ML), which consists of automatic “understanding” and improvement; natural language processing (NLP), which is the ability to “read” human language; and natural language generation (NLG), which describes when a machine “writes” or “speaks” our language.
The capacity for AI-enabled technology to “understand” a specific consumer’s needs and then deliver the just-right item as well as other, related items (like Ally Assist does with its recommendations, alerts, etc.) is called “personalization”—and it’s all the rage among today’s consumers.
It’s no surprise that the cybersecurity solutions firm EY found that banks consider FinTech software with AI to be their biggest competition.
FinTech startups are rapidly creating a new norm—and traditional financial institutions will have to innovate if they want to retain and gain customers.
When as many as 26% of mobile banking users expect their bank to provide services and products that simplify their daily lives, it’s not hard to see how personalization could be just the solution banks need to provide an experience that keeps and wins customers.
Like Ally Bank, financial institutions can start by investing in AI that serves personalized, around-the-clock customer service either in-app or in the form of an on-site chatbot. Thanks to machine learning algorithms that only get smarter and smarter with each conversation, chatbots can eventually even take care of the repetitive, manual elements of a banker’s daily job so they can focus on more important tasks.
Personalization doesn’t just help generate an annual revenue lift of 10% for organizations in the banking industry, it can give financial institutions back the ability to provide the kind of personalized, engaging, proactive, and thoughtful service that is too often and too easily overlooked in this digital age.
Innovator #2: Climb Credit Gets Students Their Loans Faster
Climb Credit is the first point-of-sale education finance company to partner with organizations that offer training programs for high-earning jobs and also help students find and fund these lucrative programs.
Initially, their loan application, review, and approval process was how they all are–highly hands-on, slow, paper-heavy, and error-ridden. It was a bad experience for Climb Credit and its customers alike.
But thanks to an integration with third-party eSignature software, Climb Credit is now able to keep sensitive applicant data even more secure and accessible while making the entire loan management process smoother for everyone involved.
Climb Credit now offers more loan products, attracts more applicants and decreases their churn with nearly-instantaneous loan decisions, and has reduced the time it takes to finalize an approved loan from 9 days to 2 with automatic verification.
“The ability to automate our borrowers' documentation workflow means that the verification workflow for us internally also becomes much simpler,” said Arjun Kannan, CTO at Climb Credit.
And, the user experience has become mobile-friendly and student borrowers can access and sign all loan documents with the simple click of a button.
All of these benefits have enabled Climb Credit to save money and time and focus on their business—growing revenue by 70% after integrating eSignature software.
Key Technology: eSignature Software
eSignature software cuts down the time it takes to gather signatures from multiple parties, saves on the overhead associated with managing the signing and storage process, and ensures that signatures and digital paperwork are secure and accessible.
And, when contracts managed via eSignature software are signed 80% faster on average than their physical counterparts, it’s not hard to see why financial organizations of all types are adopting them to improve the efficiency, accuracy, and security of their processes.
Whether you choose to build your own eSignature platform or to partner with a provider, it’s critical that your solution has three things: Bank-level security, detailed audit trails, and thorough authentication.
However, ease of implementation and scalability shouldn’t be too far behind on the list of priorities. HelloSign has been named the easiest eSignature tool to implement for several years in a row and is also infinitely scalable thanks to its easy-to-use API.
And that leads us to one more vital development shaping the future of financial services: APIs and the (many) businesses that use them.
Innovator #3: Plaid Empowers Users to Connect Their Banks to Peer-to-Peer Payment Platforms
You may not have heard of Plaid, but you’ve definitely heard of some of its clients.
Transferwise or venmo ring a bell?
That’s right, these popular peer-to-peer payment apps use Plaid (Which was acquired by Visa in early 2020 for over $5 billion—a huge payoff compared to the $310 million invested in the company before the sale!).
Peer-to-peer (P2P) payment apps implement technology that enables users to send money from their credit card, bank account, or in-app account to another user. The P2P platform is basically a “middleman” that handles what would otherwise be a pretty hands-on process.
And as the use of P2P payment continues to grow, it will be important for every financial business to look into what they can do to offer or integrate with peer-to-peer payment platforms.
Plaid is what some P2P apps (like venmo) use to quickly and easily set up secure bank payments. When a user enters their digital banking credentials into an app, Plaid authenticates their account. In the U.S., Plaid also works with most ACH processors to simplify bank-to-bank payments.
Plaid was built by developers to give other developers the tools they need to create financial apps that are helpful and easy for consumers to use. It makes P2P payments possible by providing a module that contains APIs for connecting consumers and financial institutions.
So, have we thoroughly piqued your interest in APIs for financial services? Then let’s explore a little more about their ins and outs.
Key Technology: Third-Party Integrations via API
API stands for “application programming interface” and it’s basically technology that allows different applications to talk to and share information between each other. APIs power all kinds of technology from Facebook to the weather app on your phone to the aforementioned eSignature platforms and of course P2P payment apps.
APIs are becoming widespread in the financial services industry as regulatory bodies increasingly require banking organizations to enable customers to share their data with third parties. The intention is that this will help new financial services compete against traditional institutions as well as give consumers both freedom and control in how they interact with their financial providers.
For financial businesses, the benefits include better experiences for end users, less developer time wasted, scalability without the cost and downtime, and a fresh data source that’s sure to create a novel new business model.
That’s why, just like online and mobile banking are today, APIs will be commonplace among the leading financial institutions in the near future.
How Will You Compete in the Future of Financial Services?
No doubt there is a ton of existing and emerging tech that will impact financial services in 2020 and beyond. However, for the businesses that want to compete now, we recommend concentrating on these three: AI for delivering customized experiences, APIs for innovative integrations, and eSignature software for streamlining processes.
Wondering where to start? Right here! Read up on HelloSign to see why it’s a great fit for enterprise-level financial organizations, check out the features of our enterprise-ready API (and its award for ease of implementation!), or dive right into your free trial to start sending eSignatures today.