Coronavirus The epidemic swept the world at its head, and some aspects of the way consumers conduct their financial lives will be changed forever. If there is any silver lining to all this, however, some of those changes will be positive as we head into the next year.
From policy reforms to progress in digital banking, banking experts here predict 2021.
Biden Administration Will Institute New Banking Policies
In the last four years, several major policy changes affecting the banking industry were made. Overall, according to Catherine Brown, adviser to advisor and investment firm Claros Group, the new Biden administration will likely look to do more of the financial services industry at the federal level.
However, economic issues arising from the epidemic will continue in 2021. The administration will likely focus on additional financial relief for individuals and small businesses, followed by a comprehensive infrastructure package. Priorities would likely include some changes made by the Trump administration, such as the Consumer Financial Protection Bureau and steps to reverse some Payday loans Rule.
Banks will get creative about encouraging savers
In the wake of the financial turmoil caused by the epidemic, the Federal Reserve stepped in with emergency measures to protect the economy. This included lowering federal funds’ target rate to 0.25%, the lowest since the Great Recession. The Fed said it intends to keep it near zero through 2023 at least.
This is great news for anyone who wants to borrow money, but savers have seen their interest rates almost nothing. As a result, banks will have to find other ways to encourage deposits, and prize-linked savings are an option that will see growth in 2021, says Adam Moelis, co-founder of Yota Savings, which employs a lottery facility.
“Retail banking customers will be looking for new, creative ways to earn interest on their savings. … What you see in the bank will complicate the savings experience, so instead of paying everyone a wasted interest, they will pay interest. Will deposit together. Mowlis says, “to make exciting payments to a small number of savers.”
Contactless payments will become ever more popular
During the epidemic, according to digitally head Alison Beer, the ability to digitally cash and pay in real time was not only more secure than using cash, but also more convenient. Chase Bank. “We expect consumers to continue using digital payments even more frequently in the new year.”
In fact, according to data collected by Chase, 30% of peer-to-peer payment users signed up within the last six months, while 45% of long-term users are relying on such payments, as much as they would on a Were doing more often in the year before. Devices such as PayPal, Venmo and Zelle will continue to be used in 2021 as consumers and small businesses become more comfortable with the idea of going cashless.
Customer experience will be strange
It is not just payments that have gone digital. With social disturbances coupled with an important measure against COVID-19 exposure, businesses have had to get creative in how they interact with customers – banks included.
As a customer, Vee24 CEO Priya Iyer said, “As more people, both consumer and commercial, are doing business from their homes, banks and financial institutions will continue to enhance the online experience so that it can bring the in-branch experience Repeat. ” Forum.
According to Iyer, services such as live video chat and collaboration technologies such as high-performance co-browsing, secure form filling and secure file transfer will become common next year. “These devices allow digital hand-holding during complex processes such as mortgage or commercial loan applications, which reduces errors and friction for both the customer and the banking representative.”
Body branches will become a thing of the past
With a focus on mobile apps, contactless payments and other digital services, banks will be better able to meet their customers virtually. But even though the successful vaccines of COVID-19 have been developed and distributed, the convenience and speed of virtual banking will reduce the likelihood of consumers going to physical bank branches for their financial needs.
according to a PwC survey During the spring, about a quarter of consumers prefer epidemic online banking, which is already trending, preferring to go to a branch and do online banking.
“With self-service technology that meets most of their needs, the average customer will be able to bank without a physical branch,” said Blake Morgan, a customer experience at Forbes written in March.
Identity theft will run up rampant
Although the increase in digital services makes banking more convenient, secure and accessible to many people, it also opens the door for more fraud. As more Americans will conduct their financial lives in 2021, identity theft stems from data breeches and social engineering scandals will also increase, says Giselle Lindley, head fraud advisor at ACI Worldwide, a payment services firm.
“Many people are experiencing social isolation and unemployment, and are therefore susceptible to endorse romance scams, fake employment advertisements and incentive or paid offers,” she says. “Others are simply spending more time with online entertainment, where fraudsters are lying with fake giveaways and investment deals, all with a goal to convince unsuspecting victims to hand over financial statements and other sensitive personally identifiable information . “
Good News? According to Lindley, financial institutions will face increasing pressure from consumer protection regulators to protect customers from fraud and to assume liability for losses.