How will banking and financial services change in 2022
With 2022 being just around the corner, we explore some of the trends that are expected to reshape and influence banking and financial services in the months to come. Before we get there, let’s explore some of the biggest trends of 2021 in the banking and financial industries. 2021 was a rather unusual year due to the ongoing coronavirus pandemic and all the different restrictions that were and are still in place.
The impact of the Covid-19 pandemic on the global economy
Not a single industry was left unaffected by the Covid-19 pandemic. According to this report published by the USA PNAS (Proceedings of the National Academy of Sciences), the Covid-19 pandemic and related restrictions caused a major economic shock in both smaller and bigger organizations and companies.
According to the same report, over forty-three percent of companies operating in the USA had temporarily shut down their doors. The same report also suggests that on average, companies reduced the number of employees by around thirty-nine percent due to the pandemic.
The decline in employment was particularly noticeable in the New York state where over fifty-four companies closed their doors and where employment rates went down by over forty-seven percent.
Companies involved in the retail and hospitality industries suffered the most, while professional banking and finance services experienced not so dramatic economic disruptions.
However, these companies also embraced remote production, ordered some or all their employees to work from their homes, and communicate with each other via video conference platforms.
Fortunately, in 2021 we saw the global economy finally recovering and certain markets soaring. According to this report by International Monetary Fund, the global economy is expected to grow at a rate of 4.9% in the following year.
Trends that will define banking and financial services in the months to come
Despite all those different challenges that 2021 brought, global banking and financial institutions had a great year. In the months to come, leading banking institutions are expected to embrace the power of digital technologies.
Thanks to embracing future-fit technologies and related business strategies, banking institutions are expected to accelerate their digital transformation in order to survive and compete in a truly unpredictable post-pandemic environment.
Most experts believe that businesses and companies involved in the banking and financial industries will invest more in fintech, talent, and tech in 2022.
In other words, these companies are expected to achieve amazing digital growth in the months to come after spending a lot of their resources on digitalization and tech.
Leading banking and financial institutions in the world, including leading banks of China and the United States will probably splurge on their tech workforce and acquire more adaptive management teams to compete in a new, completely technology-driven environment.
Most experts believe that 2022 will cause a major surge in tech-driven trends, so in the next couple of months, it is expected to see banks and financial companies acquiring more fintech firms.
In 2022, companies and businesses involved in banking and financial services are also expected to work on expanding their lineup of products and offer more sustainable services.
Regulators and consumers have already been calling for sustainable digital transformation, and in 2022, banking and financial companies are expected to offer more products that align with the latest governance, social, environmental, and sustainability principles.
For consumers, this brings green mortgages and loans, as well as, more sustainable checking accounts. For the banking and financial industries, 2022 is expected to be the year of open finance.
With major regulators in the United Kingdom and the European Union encouraging open finance measures, banks and other financial institutions will be more open to experimenting with a more collaborative, open finance approach.