Emerging trends in the BFSI sector

Technology has consistently been at the helm of advancement in the modern digital economy for the BFSI (Banking, financial services, and insurance) industry. The market sector has repeatedly illustrated how deploying technology-based solutions has enriched the end-user experience overall. Future trends in the banking sector will be influenced by digital business models. Digitalization is already causing changes in consumer behavior and choices for many conventional banking services. Advancements in digital banking technology will affect how well the BFSI sector evolves over the coming years. 

Significant transformations in the BFSI sector 

There have been radical reforms in the BFSI sector ever since the outset of Covid-19. The pandemic has expedited the financial sector’s digital change, compelling many established financial firms to acclimatize to the shifting environment. For example, the transition away from cash and towards electronic payment methods has been taking place over time. Financial firms have countered by making significant investments in digital infrastructures and offerings because of a large number of customers using mobile and internet banking to administer their accounts from home. Businesses in the BFSI sector have been compelled to enhance their online user experiences as a result of the transition to digital platforms. 

To know more, read Top emerging technologies in financial services and how to upskill in them

Impact of technology in the BFSI sector 

The BFSI sector has undergone a massive transformation that has opened up new, better prospects for users. The pace at which banks function in the country today demonstrates the wide range of effects that technology has had on the financial sector. Banks and other financial organizations can now provide digital banking services, enabling clients to process transactions and retrieve financial data whenever and wherever they choose. 

Each of these procedures has accelerated the operations of the BFSI industry, thanks to the impact of technology on BFSI industry trends. Every banking or associated institution has been prompted to embrace this technological change to survive and thrive as a result of technological breakthroughs in the finance sector. Let’s examine the latest trends in the BFSI Sector that have emerged as a result of technology’s influence on the industry.

BFSI industry trends to watch out for 

Some of the BFSI industry trends to watch out for in the coming years are discussed below:

• Artificial Intelligence & Machine Learning (AI & ML)

The BFSI industry has emerged as a pioneer in employing ML and AI technologies to boost productivity, enable quicker time-to-market for new goods and services, and allow a hybrid workforce to remain adaptable in the face of the profound disruption that is reshaping the sector. By the end of 2023, many banks will transform into wholly tech-based enterprises, utilizing their huge clientele bases and distribution channels to offer digital solutions and consumer interactions, typically using natural language processing. 

• Big data analytics 

Big data allows banks to centralize their business models on customer behavior. They may increase income and provide more personalized services by fully employing predictive analytics. The success of a bank’s digital transformation in the future will be contingent on its ability to learn from its customers. Market segmentation and cross-selling to current clients will depend heavily on analytics. So, banks will have a better understanding of consumer behavior and expenditure patterns, which will help them come up with offerings that are more suited to their target market.

• Blockchain 

Blockchain technology holds the promise to revolutionize the BFSI industry by enabling safe, decentralized transactions. Blockchain can assist in lowering transaction costs, accelerating settlement timelines, and enhancing privacy and accountability. Banks are looking into ways to meet the demands of the growing crypto consumer base. Banks are attempting to make it simple for medium-sized businesses to incorporate cryptocurrency services into their online banking systems. As a result of seeing their competitors provide cryptocurrencies, many bank councils are urging management to join the cryptocurrency market.

• Cloud banking 

Cloud is among the essential components of the digital revolution. The use of the cloud increased significantly in the years following the epidemic, and it will still be a top priority in 2023. Initial trepidation was evident due to the general sensitivity of the information, but it is rapidly dissipating as firms adopt the shared responsibility paradigm and the cloud’s secure infrastructure. The use of the cloud speeds up concept realization and go-to-market strategy in addition to reducing the on-premises presence and related costs.

• Robotic process automation 

RPA systems can communicate with one another at the application’s user interface level to precisely replicate the actions in the same way as a human working across several apps would. RPA is incredibly flexible, economical, and simple to use and has so far aided in the expansion of the BFSI industry. Here are three reasons to support this assertion:

1. RPA has aided global investment banks in minimizing case bottlenecks by increasing case-handling effectiveness.

1. RPA has improved customer satisfaction for insurance and annuity companies by “indexing” changeovers with online interaction and lowering inbound calls.

1. RPA contributes to a decrease in manual errors, which raises the standard of financial services.

• Neo banks 

Digital banks will now maintain a dominant position in the banking industry after shattering the loop of traditional marketplaces. While the majority of transactions will take place online, bank branches will see a decline. Neo banks provide traditional banks with a less expensive substitute without the requirement for physical branches. Consumers now have access to and can enjoy a variety of personal financial services on their devices, thanks to improvements in artificial intelligence, biometrics, internet banking, and cyber security 

• Advanced cyber security 

The BFSI industry is utilizing technology more frequently, which increases the demand for cybersecurity to defend against online attacks. Banking organizations are making significant investments in cybersecurity solutions to guard client data and avert privacy violations. E-wallets are quite vulnerable to phishing assaults, intrusion attacks, fraudulent KYCs, and improper software manipulation by authorized users. The RBI has instructed all banks to issue EMV chip-based devices to resist these complex cyber threats. 

Pursue an online MBA in BKFS 

Working professionals who aim to improve their knowledge and abilities in the financial services industry can enroll in TAPMI’s online MBA-BKFS (Banking and Financial Services) program. The flexible program design allows working professionals to keep up with the course material while working. The program offers four industry-oriented electives – banking, capital markets, advanced corporate finance, and analytics for banking and finance to help working professionals advance to leadership and managerial roles in the BFSI sector. Individuals will gain updated knowledge and experience that will align with the demands of the BFSI sector after the completion of the program. The program will help learners to get command over key areas in the BFSI industry, such as digital transformation in the banking sector, cryptocurrency and blockchain technology and innovations in the new-age banking environment. 

You can also read, How TAPMI online MBA-BKFS electives help professionals tailor their career paths.

Conclusion 

The BFSI sector is ready for a major overhaul with cutting-edge developments in this sector, which aim to revolutionize BFSI operations by putting clients at the center of their current and long-term goals. The future of the BFSI industry and its trends are promising, with enterprises continuing to try to expedite their digital transformation excursions to meet the demands of a consumer base that is becoming more and more tech-savvy. So enroll now in the online MBA – BKFS program from TAPMI to accelerate your career in this much-in-demand field and experience how MBA BKFS is adapting to emerging trends in BFSI Industry.