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The digital trends disrupting the banking industry in 2021
The banking industry is in a much healthier place now than it was after the financial crisis of 2008.
As a result of the increasing complexity of the banking ecosystem, financial giants and disruptive startups are navigating challenges and opportunities daily.
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Banking Industry Overview
The banking industry is in a much healthier place now than it was after the financial crisis of 2008. Total global assets climbed to $124 trillion in 2018, according to The Banker's Top 1000 World Banks Ranking for 2018.
With so much money to manage, major banks such as JPMorgan Chase, Bank of America, Wells Fargo, and more are releasing new features to attract new customers and retain their existing ones. On top of that, startups and neobanks with disruptive banking technologies are breaking into the scene, and traditional financial institutions are either competing with them or merging with them to improve their customer experience.
So let's dive into the banking industry, the challenges it faces, and the road ahead.
Banking Industry Trends
The most prevalent trend in the financial services industry today is the shift to digital, specifically mobile and online banking (more on each of those in a bit). In today's era of unprecedented convenience and speed, consumers don't want to have to trek to a physical bank branch to handle their transactions. This is especially true of Millennials and the older members of Gen Z, who have started to become the dominant players in the workforce (and the biggest earners).
This digital transformation has led to increased competition from tech startups, as well as consolidation of smaller banks and startups. In 2018, overall fintech funding hit $32.6 billion by the end of Q3, up 82% from 2017's total figure of $17.9 billion, according to CB Insights.
To be frank, mobile banking is all but a requirement for consumers at this point. In Business Insider Intelligence's Mobile Banking Competitive Edge Study in 2018, 89% of respondents said they use mobile banking, up from 83% in 2017.