2022 predictions for the financial services industry
Summary
The past two years have been defining moments for the business landscape, characterised by rapid changes and short-term survival strategies.
In 2022, businesses must start looking to the future and taking strategic steps to drive new priorities and strategies that will change the course of industries as a whole.
More investments will be made in innovation: Innovation lagged in 2020 and 2021 as companies adapted their operations quickly to suit short-term survival strategies. In 2022, investment in innovation is set to inject much-needed value into the landscape. This helps support long-term recovery and growth. This goal is particularly critical because the achievement of every other business goal hinges on the success of this step.
ESG concerns will take precedence: In 2022, the pressure companies already face to centralise ESG principles in their operations will continue to mount. Consumers are also set to pay much closer attention to company policies and standards and make decisions accordingly. Ensuring more sustainable, ethical operations that protect the environment helps a company get ahead of the competition and foster a more loyal customer base.
Personalised services will take over the customer experience: Contemporary customers demand timely solutions, service, and insights as and when they want them. For financial services, this means a more straightforward customer experience that cuts out possible confusion or lengthy processes. Companies can create a more personalised customer experience cost-efficiently with machine learning and AI support.
As 2022 approaches, the global business landscape continues to undergo rapid changes; changes that have the potential to either continue the trends 2020 and 2021 have made a natural part of the ecosystem or create all-new challenges in the coming months.
Whichever way the world changes over time, the next year presents an unmissable opportunity to shape the future of businesses and whole industries alike. Even as we continue to monitor the landscape and its many changes, some priorities have emerged as critical for the months ahead.
Across all industries and countries around the world, a few core developments are set to change the way companies invest and allocate their resources for success and reach their full potential in the short and long term.
On top of all the changes and priorities predicted for the new year, it is also evident that financial leaders will need to set new metrics and key performance indicators in order to chart their growth and formulate more informed strategies.
More investments will be made in innovation
Over the past two years, innovation has occurred on a predominantly survival basis.
In 2020 and much of 2021, companies had to adapt their operations and processes to function in a distanced environment rendered by COVID-19.
Treating these changes as short-term survival strategies inevitably meant that spending on value-added innovation fell across the board. In 2022, more investments in innovation are needed to inject much-needed value into the landscape.
Companies must start their journey from survival-based strategies to innovative strategies that will set them back on track to achieving their long-term goals that have been informed by the pandemic.
Investing in innovation is a necessary cost to add more value to bottom lines as well as for customers. Adding this value and focusing on higher value-added goals from individual functions to the financial services industry as a whole is a surefire way to accelerate long-term recovery and growth.
Approaching this particular goal in 2022 is especially important for companies in the financial services industry, not solely because of the heavy financial investment it requires, but also because every other business goal will be dependent on how well you can hit your innovation targets.
ESG concerns will take precedence
The risks and threats of climate change have only been gaining prominence over the years and have reached a critical turning point in the current business landscape.
Companies in Europe are especially prevailed upon to act in accordance with the terms set out by the European Union, to help the Union reach its goal of climate neutrality by 2050, and reap the benefits of an economy with net-zero greenhouse gas emissions.
In the lead-up to 2022, it is clear that the pressure on a company to act and centralise environmental, social, and governance (ESG) principles in their core policies is not directed at them through government bodies and policymakers alone but by consumers as well.
Consumers have higher expectations and standards that they expect the businesses they patronise to meet. In a highly competitive market, an inability to meet these expectations simply means the loss of a customer and the revenue they bring.
Getting ahead of the competition in the financial services industry means getting ahead of ESG by ensuring sustainable, ethical operations, and more accessible, climate-positive moves within a company that drives quantifiable change in the external environment.
Personalised services will take over the customer experience
Even as companies take the digital route, customers have become more empowered and aware of the power they hold to influence business decisions and take their loyalty elsewhere if their expectations are not met.
This means the demand for personalised services has never been higher.
The financial services industry is known for the perceived complications of its offerings and the confusion its users generally experience in their interactions with the industry. For financial services companies in an increasingly digital world, the customer experience is more important than ever before.
Contemporary customers demand timely solutions for the challenges they face and relevant insights delivered to them at the right time. They also expect a more personalised experience, which allows them to interact with a company on a one-on-one basis.
Rising to this expectation will help the financial industry tailor its approach to finance digitalisation and cater to customers much more effectively to secure the future of the industry as a whole.
The financial services industry is poised for transformation
Much like many other industries and businesses across the world, the finance industry is at a turning point in its trajectory.
The actions companies take in the immediate future have the potential to set the course for 2022, the future of the industry, and the goals that will define it.
