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The Financial Services industry seems to be in a constant state of change. Just when 2022’s lows and highs feel like a familiar cycle, 2023 comes along and brings a new whirlwind. Between technological developments, recession and inflation concerns, heightened increases of digital platforms and the recent swing of massive company lay-offs, there’s a lot to keep track of.
As experts in data services, Nexis is always on top of news and predictions in finance. We’ve outlined some of our key trends in Financial Services that are worth looking out for, and provided some insights on where the industry is headed. Take a look at our highlights below and use Nexis for Finance and the Nexis Dossier Suite to keep up with these ever-changing ideas.
In their January 2023 predictions reporting, Forbes named technology as a critical factor in Financial Services trends this year. More specifically, they assert that customers and businesses will have higher expectations for the level of clarity, depth and communication when it comes to data delivery.
“Adopting tools and technologies designed and built for financial services will help resolve pain points more effectively and eventually derive greater value,” Forbes predicted last month.
Deloitte’s 2023 outlook shared similar advice for Financial Services professionals. As 2023 welcomes in a time of potential recessions, supply chain disruptions and inflation, Deloitte predicts that technology and data will be foundational in building out successful strategies. “While some organizations may choose the cost-cutting route, others will point toward smarter execution, finding ways technology can be deployed to add value and create superior customer experiences,” they reported.
As the sector adapts to the expanding digital landscape, a lot of Financial Service companies are bringing on third-party tools, like Nexis, to help them receive concise, useful data and reporting for their businesses. A study done by S&P Global found that “nearly one-third (32%) [of financial professionals surveyed] were already leveraging third-party support for 25-50% of their operations workflow processes.”
Professionals are learning that doing things on their own is no longer allowing them to be up to date on the consumer expectations for their services. When the industry is quickly adapting to a new way of working and improving things like customer service and protection standards, it’s important for providers to rise to the level of their competitors’ growth so they do not fall behind.
MORE: How Banks are Using AI & Big Data
The COVID-19 crisis brought along a financial reckoning for many people, as some small businesses closed and workers moved to remote work. One impact of that migration is an increase in alternative lending.
This type of lending is appealing to a wide range of customers who might otherwise be denied loans by traditional banks. Previously struggling small businesses, freelancers and start-ups, as well as people whose housing or financial situations were disrupted by layoffs, causing their credit scores to plummet, all are finding new ways to get around traditional credit and bank loan denials.
According to Global News Wire, “The Global Alternative Lending Platform Market size is expected to reach $8.2 billion by 2028,” which is a 22% Compound Annual Growth Rate. That means financial service companies will fall behind if they don’t acknowledge and adapt to this growing market.
The one thing all businesses can do in the face of massive change and general distrust toward the market is prioritize the customer. In the aforementioned Forbes prediction article, it’s mentioned that “post-pandemic, customers want to be taken care of by banks and insurance companies with the right products and services.”
Forbes also underscores that a larger portion of the workforce is made up of the Millennial and Gen-Z generations, as Boomers begin to retire. Generations raised by the internet are naturally more likely to expect correct reporting and trend data at a moment’s notice, because search engines have been at their fingertips since childhood.
All of these digital trends are leading to a larger movement toward more inclusion and accessibility within personal finance. The G20 committed to “advance financial inclusion worldwide” in the year 2017, and we’ve continued to watch the spike in general access to financial services and loans.
This not only helps tackle poverty and the giant wealth gap, but it also helps businesses find and bring on new customers who are interested in improving their financial literacy. It’s important to remember, in the midst of this growth, that people who may not have previously had access to financial services are likely to use technology to begin their search for providers, including places like Twitter and TikTok.
The overall impact of the growing innovations in financial technology is two-fold; (1) businesses are able to offer better, more reliable, more personalized customer service and (2) providers have wider access to data which allows them to develop more innovative financial services.
For improved customer service experiences, banks turn to technology, like sentiment analysis tools via speech readers, SMS systems that circumvent phone calls and lead to quicker response times, and improved identity protection tools, according to a report from CMS Wire. The report says that these tools have largely helped banks satisfy more customers; for instance, “AI-based speech analytics program enabled [DenizBank] to achieve an accuracy score of 95% for customer inquiries.”
MORE: Why Artificial Intelligence is a Game-Changer for Banks Worldwide
Financial advisors and customers alike know that company and executive data is an unparalleled way to understand what’s happening in the industry. By viewing which companies are growing in employees and stockholders and which are currently seeing major stock sales and layoffs, professionals and customers can assess who to keep an eye on. C-suite executives buying or selling their own company’s stocks is, after all, one of the biggest signals for investors.
With tools like Nexis, providers are able to see important records for more than 240 million companies. The search function leads to key information about company headquarters, earnings, stock prices, executives and more, to help inform any type of investment decision.
Tracking competition is imperative when there are so many new customers on the hunt for financial help. If another company is suddenly offering way better rates, more out-of-the-park promises and improved customer experiences, they’ll be welcoming in customers before they even hit your radar.
Enterprise League named competitive analysis as one of the best ways a business can stay on top because of the ability to spot potential threats, create better content, learn about what’s to come in the industry and understand the problems other businesses might be facing or foreseeing. “The business world has always been incredibly competitive, and it may be challenging for your enterprise to grow if you neglect to monitor others in the same industry,” they report.
As mentioned, company and executive data are a great way to stay on top of investment recommendations and find new market opportunities. It’s often difficult, though, to find up-and-coming companies or lesser-known early risers when the Internet is chock full of financial blogs trying to make game-changing calls.
It’s important to use trustworthy sources that won’t inflate or undermine a business’s financial outlook so that providers don’t simply jump on the next bandwagon without proper research.
Data analysis, like the sentiment reader DenizBank used, is a helpful way to understand what customers are looking for and identify major pain points. By monitoring other companies and executives, businesses can get an idea of what their customer service approaches have adapted into—like faster chat programs and improved identity theft protection tools—and can see if those changes are successful in maintaining and recruiting customers.
Nexis’s Dossier allows users to keep tabs on companies and executives and investigate mergers, customer acquisition and other major signs of a skyrocketing business.
Industry analysis is a way to understand the competitiveness of an industry as well as gain insight into future prospects and the potential for external influences over the sector. Reports like SWOT Analyses, financial reviews and third-party predictions are helpful to see the full picture of the industry.
By monitoring these reports in a streamlined way, Nexis users are able to better predict the natural ebbs and flows of the financial services business.
MORE: SWOT Analysis 101
Financial service professions face a great deal of challenges in 2023. As the economy heads toward recession and inflation rises, providers will need to ensure customer trust and satisfaction while also staying ahead of the curve to offer impressive promises to new clients.
The best armor against tumultuous markets and unpredictable gains and losses is a data tool your business trusts and understands. Nexis for Finance is a perfect one-stop-shop for staying on top of 2023 trends and keeping your company on top of the recommended strategies for financial service growth for this year and beyond.