Payment & Branch Transformation, Tech & Mobile Issues Lead Coming Trends

Experts from Brookfield, Wis.-based financial technology powerhouse Fiserv forecast what trends to expect in 2019 for credit unions, retail banking, payment and branch transformation, tech innovation, and the mobile experience.

“Heading into the new year, credit unions will continue to focus on enhancing their technology and overall member experience, but savvy financial institutions looking to grow will extend their focus onto four critical points,” according to Bill Handel, vice president, research, Raddon, a Fiserv Company.

Handel predicted credit unions will: focus on increasing deposits (for the first time in a decade), shift concentration and rely less on indirect channels for loan growth; look to expand and build their member bases; and utilize data and analytics tools to serve members better.

John Macaluso, SVP of business development, bank solutions, Fiserv, said, “As Gen Z enters the banking and business world, the traditional idea of what defines a financial institution is fading into memory. Real-time payments, the rethinking of the physical branch, and a focus on digital banking are reshaping the future of retail banking.”

This includes payments transformation, Macaluso said. “The move to real-time payments and transaction-level reconciliation means current bank processes supported by people will no longer be adequate, banks and credit unions are turning to back-office automation to support a faster payments model, while managing risk and cost.”

Another anticipated inclination coming in 2019 in the banking world is expected to come through branch transformation. Macaluso noted where it makes sense, financial institutions are still opening branches, but the average square footage of each continues to shrink. “Interactive teller machines are enabling self-service capabilities in the branch, the drive-through lane and standalone locations, allowing financial institutions to expand cost-effectively, while cross-trained universal bankers handle more complex requests.”

As for the back office, a growing number of financial institutions are moving away from day-to-day management of technology to focus more time on the customer experience. Outsourcing some or all technology management responsibility is a trend that will continue to gain steam across financial institutions of all sizes.

As far as tech innovation, Macaluso sees open banking initiatives sparking innovation and pushing new business models based on collaboration between financial institutions and third-party providers. “This flexibility will enable the delivery of unique, differentiating experiences for consumers. In addition, the first wave of bots, machine learning, robotic process automation and natural machine language is being incorporated into financial services.” In addition, financial institutions are beginning to use artificial intelligence for automated loan decisioning, for example. “Overall, a handful of institutions will lead the way in implementing new innovations with many evaluating how emerging technologies can potentially further their strategic goals.”

Fiserv specialists view payments as central to the customer experience, and the push to provide consumers with a rich, holistic experience will lead to three major payments trends in the coming year:

• Creating an intuitive mobile experience. Mobile’s application as a payment method is well established, and the mobile mindset is permeating all kinds of consumer interaction models. Going beyond just accessibility, automatic payments can make the mobile payments process seamless, while alerts and notifications facilitate interactions in real time.
• Breaking down silos between channels. A siloed approach to channel management often leads to higher costs and missed opportunities to strengthen relationships with customers. In 2019, expect payments silos to continue to disappear as organizations use consumer data from multiple touchpoints to gain insights and create a more personalized billing and payment experience.
• Achieving real time. In many ways, the real-time movement flows around affirmation of payments. In the coming year, there will be a continued need to tie systems together to gain a holistic view of payment status and provide customers with the detailed information they crave.