10 Digital Trends That Will Improve Banking in 2023

Open banking is set to become even more important in 2023, as customers demand more choice and control over their financial data.

Open banking is a financial services innovation that allows greater connectivity between banks and third-party providers. It enables secure sharing of financial data between different financial institutions, making it easier for customers to access a wider range of products and services. This approach fosters competition, drives innovation and ultimately benefits consumers by providing them with more choice and better value for their money.

Open banking is not just limited to banks and fintech startups. Other industries such as retail, telecommunications, and even the automotive sector are starting to explore the potential of open banking to offer customers additional services that complement their core offerings. As open banking continues to gain momentum, it is expected to revolutionize the way financial services are delivered and consumed, creating a more seamless, integrated and personalized experience for customers.

Discover our Open Banking Suite.

Blockchain technology will continue to be an important trend in banking in 2023, with more banks exploring the potential of this technology to improve security and streamline transactions.

Blockchain technology is a decentralized and secure method of storing and transmitting data across a network of computers. It is well known for its use in cryptocurrencies like Bitcoin, but its potential goes far beyond that. In the banking industry, blockchain has the potential to revolutionize the way financial transactions are conducted, with benefits such as increased security, transparency, and efficiency.

Some of the trends in blockchain that will improve banking in 2023 include:

• Central Bank Digital Currencies (CBDCs): Several central banks around the world are exploring the use of blockchain to issue digital versions of their national currencies. CBDCs could offer several benefits over traditional cash, including increased security, reduced transaction costs, and increased financial inclusion.
• Decentralized Finance (DeFi): DeFi is a blockchain-based financial system that allows users to access financial services without the need for intermediaries. With DeFi, users can lend, borrow, trade, and invest in cryptocurrencies and other digital assets, all while maintaining control of their funds.
• Smart Contracts: Smart contracts are self-executing contracts that can be programmed to automatically enforce the terms of an agreement. They can be used for a variety of financial transactions, such as insurance claims, trade finance, and cross-border payments.
• Supply Chain Management: Blockchain can also be used to improve supply chain management by providing a transparent and secure way to track goods as they move through the supply chain. This can help reduce fraud, improve efficiency, and ensure compliance with regulations.
• Enhanced Security: Blockchain's distributed and immutable ledger can provide enhanced security for financial transactions, making it harder for bad actors to tamper with or steal data.

As the banking industry continues to explore the potential of blockchain, we can expect to see more innovative use cases and applications emerge in the coming years. With its ability to increase efficiency, security, and transparency, blockchain has the potential to fundamentally transform the way we think about financial transactions.

Cybersecurity has always been a critical concern for the banking industry, but in 2023, it is expected to be even more essential. As the world becomes increasingly digital, so do the risks and threats to sensitive financial information. Banks and financial institutions will need to invest heavily in cybersecurity measures to ensure the safety of their customers' data and protect against cyber attacks.

One of the key trends in cybersecurity for 2023 is the increased use of AI and Machine Learning to identify and prevent cyber attacks. Banks will also need to invest in more advanced encryption methods to protect customer data, and implement two-factor authentication to reduce the risk of unauthorized access.

Another trend is the growing importance of cybersecurity regulations and compliance. Governments and regulatory bodies around the world are putting more pressure on banks to take cybersecurity seriously and implement appropriate measures to protect against cyber threats.

Finally, banks and financial institutions will need to focus on training their employees to be more aware of cybersecurity risks and how to prevent them. This includes educating employees on best practices for password management, identifying phishing attacks, and reporting suspicious activity.

Biometric authentication, such as fingerprint and facial recognition, will become more prevalent in banking in 2023, as customers demand more convenient and secure ways to access their accounts.

Biometric authentication is a method of verifying a person's identity using their unique physical or behavioral characteristics, such as fingerprints, facial recognition, iris scans, or voice recognition. This technology has been around for a while, but its use has skyrocketed in recent years with the advent of mobile devices and the need for more secure authentication methods.

There are numerous benefits of biometric authentication. Firstly, it is much more secure than traditional authentication methods such as passwords or PINs. Biometric data cannot be easily replicated, making it much more difficult for fraudsters to gain access to sensitive information. Additionally, biometric authentication is much more convenient for users, as they do not need to remember complicated passwords or carry around tokens or smart cards.

Digital transformation will continue to be a key trend in banking in 2023, as banks look to transform their operations to meet the demands of a rapidly changing digital landscape.

Digital transformation is the integration of digital technology into all areas of a business, resulting in fundamental changes to how businesses operate and deliver value to customers. This includes reimagining business models, products and services, customer experiences, and operational processes through the use of digital technologies.