Looking ahead to finance trends that will arise during the rest of 2022, one word comes to mind: evolution.
That evolution will be the focus of legacy institutions, such as banks and credit unions, as they strive to adapt to an international landscape that is rapidly turning to fintech.
Thanks to major fintech developments – such as crowdfunding, payment apps and cryptocurrency – banks are finding that millions of people now have other options.
For example, why go beg a banker for a business loan when crowdfunding might do the trick? Or why petition a bank for a merchant account when there is any number of fintech apps that can easily and seamlessly step in as a merchant account — and with a lot less hassle?
This evolving climate will drive more legacy banks and others into the cloud. Even PayPal (and early fintech species) will migrate to Google Cloud Platform soon. Capital One is going over to Amazon Web Services.
According to a report issued by Accenture, cloud investment will grow by 15% in 2022.
More and More Automation
Everyone is automating these days and the financial sector is no exception. According to KPGM, cost savings of up to 75% can be realized by automating such tasks as customer information verification, financial statement reporting, cash management and more.
Just as ATM machines dramatically reduced the number of bank tellers needed, AI bots, software and apps can move into more complex areas that are currently handled by a warm body. What about all those lost jobs to machines? Well, promoters of automation prefer to think of it as “freeing up skilled employees to work on more important tasks.”
Another trend for 2022 will be increased use of API management platforms by banks. API stands for applications programming interface. An API is a software that acts as an intermediary between other software.
An API management platform, then, is used to access, control, distribute and analyze API for developers in an enterprise realm. They help an organization by offering more efficient centralized control while bolstering robust performance and better security.
Whether you are catching all this or not, just keep in mind that API management is a sector on course to be a $6.2 billion industry by 2024. Banks and other financial institutions will be working aggressively to bolster their API capabilities in 2022.