Banking Sector To Witness Major Transformation In The Future

The banking industry has witnessed many ups and downs over the years. Whether it is the depression after World War 2 or the burst of the dot com bubble, the banking industry’s performance can define the future of a country.

The history of the banking industry is rich with watershed moments. Over the years, banks came up with innovative approaches to deal with the recession, increasing debts, and long-term investments. They have become quite proactive and trying to challenge long-held assumptions, aiming to transform the industry as we know it. The acceptance and inclination toward digitization play a major role in changing the banking industry.

During the Covid-19 pandemic, the banking industry was the first who actively be involved in the management of the pandemic. For instance, serving the clients first regarding offering to finance relieves to patient or patient’s family members while keeping the social distance and offering services digitally. On the other hand, some banks in China and Korea requested lenders to decontaminate the physical banknotes and quarantine them for two weeks. Even the Armenia banking industry reviewed the terms of loans during the pandemic to keep the sector alive during such unprecedented times.

Over the years, the banking industry has changed drastically. According to Allied Market Research, the Armenia banking market is expected to reach $996 million by 2026, growing at a CAGR of 8.5% from 2019 to 2026. The integration of major technologies has been taking over financial services. Digital banking has a huge impact on the sector.

For instance, Google has partnered with Citigroup on checking accounts and Facebook launched a digital currency, Libra. These are a few examples of how the finance sector is on the verge of transformation. In the future, the banking sector will be driven by advanced technologies to cater to tech-savvy customers.

Furthermore, governments and the private sector have encouraged the inclination toward online banking. The increase in digital banking traffic has forced companies to upgrade their systems and meet demands. The Covid-19 pandemic and sudden worldwide adoption of remote working have increased reliance on online banking and telephone banking.  

Having said that, investment in the financial sector has increased recently. While some believe that crises such as the pandemic are the worst period for investment, the reality is quite controversial. Experts believe that there is no good time for investing in the market. The penetration of smartphones and other technologies has enabled users to start investing with as little as $5. Within seconds, customers can invest and have plenty of options such as Stock market, mutual funds, investment bonds, saving accounts, and others.

So, what will be the future of the banking industry? In one word­- digital. The inclination toward going cashless will increase in the future. Cashless transactions mean lower crime rates, low healthcare issues such as the spreading of diseases through contact, and quick transactions. Moreover, banks and FinTech companies offer affordable and faster services to increase the use of online banking and make it more accessible.

The banking industry is changing drastically. Due to the penetration of advanced technologies and increasing demand for digital banking from consumers, the banking industry will witness a major transformation in the coming years.