# The digital transformation of the financial services: what to expect in 2018
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2018-01-19
Category: FINANCE
Category URL: https://financedigest.com/category/finance
Meta Title: Top 5 Predictions for Financial Services in 2018
Meta Description: Discover the transformation of financial services in 2018 with digitalisation, blockchain adoption, customer intelligence, and more. Stay ahead of the curve!
URL: https://financedigest.com/the-digital-transformation-of-the-financial-services-what-to-expect-in-2018html

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By **Jim Schulenberg**, Market Development Executive, financial Services, DMI

2017 saw many functions within the finance industry being transformed by the power of technology. In the next year we expect to see widespread digitalisation of financial services, so much so that organisations failing to keep pace will be left behind. This [transformation will see the replacement of legacy processes with automated digital](https://www.financedigest.com/digital-transformation-for-the-world-of-finance-the-rise-in-collaboration-tools-and-saas-applications.html "Digital transformation for the world of finance: The rise in collaboration tools and SaaS applications ") processes enabled by the cloud. Because of this, issues with data analysis, transaction security, and scalability will all be removed. Here are our [top five predictions for the year ahead:](https://www.financedigest.com/the-year-ahead-top-payments-trends-to-watch-out-for-in-2022.html "The year ahead: Top payments trends to watch out for in 2022")

1. The continued digitalisation of [financial services](https://www.financedigest.com/the-future-for-financial-services-is-digital-engagement.html "The future for financial services is digital engagement")

A survey conducted by [bankrate.com](http://bankrate.com) last year reported that 40% of Americans had not visited the bank in the last six months, falling in line with the general trend that less and less people visit the bank.  Banks across developed regions will continue to catch onto this insight and use it as an opportunity to go digital. Therefore, we are going to see a [change in existing physical infrastructures and legacy delivery options across geographies as the financial industry goes digital](https://www.financedigest.com/digital-marketing-for-finance-and-insurance-firms-is-changing-are-you-ready.html "Digital marketing for finance and insurance firms is changing — Are you ready?").

The elimination of physical [banking infrastructures](https://www.financedigest.com/are-banks-destined-to-merely-become-infrastructure-providers-in-the-banking-industry-of-the-future.html "Are banks destined to merely become infrastructure providers in the banking industry of the future?") has a wealth of benefits for its various stakeholders. For providers, it drastically reduces outgoing costs, removing the need to fund the upkeep of physical branches. Consequently, this has provided an inviting space for start-ups, with a more equal playing field. As well as this, the digitalisation of the industry has also provided a platform for the fintech industry to continue to grow as more technical [solutions become](https://www.financedigest.com/becoming-more-than-a-bank-adding-value-through-financial-solutions-as-a-service.html "Becoming more than a bank: adding value through financial solutions as-a-service") available and needed.

This year, we can expect to see more financial services relieving themselves of real estate, eliminating their computing liability and moving to the cloud and other [digital services to simplify banking](https://www.financedigest.com/how-to-enhance-banking-services-with-digital-performance-intelligence.html "HOW TO ENHANCE BANKING SERVICES WITH DIGITAL PERFORMANCE INTELLIGENCE") and improve engagement with their modern customers.

2. The adoption of blockchain for transaction services

The technology behind bitcoin [creates a distributed record of digital](https://www.financedigest.com/world-class-finance-digital-transformation-and-analytics-based-decision-making-among-key-imperatives-for-creating-finance-agility.html "World-Class Finance: Digital Transformation and Analytics-Based Decision Making Among Key Imperatives for Creating Finance Agility") events that is shared and reviewed between parties. [Blockchain technology](https://www.financedigest.com/how-blockchain-technology-can-help-the-fashion-industry-make-verifiable-green-claims.html "How Blockchain Technology Can Help the Fashion Industry Make Verifiable Green Claims") creates a database of digitally recorded data that is organised into blocks, which is then stored in a linear chain that is cryptographically hashed.

For the financial [services industry](https://www.financedigest.com/balancing-innovation-and-security-within-the-financial-services-industry.html "Balancing innovation and security within the financial services industry"), blockchain will become integral for transactions both within and between enterprises. This technology will enable all transactions to be recorded and traced and will provide the [customer with a digital](https://www.financedigest.com/the-cervical-total-disc-replacement-market-to-grow-based-on-customized-digitization.html "The Cervical Total Disc Replacement Market to grow based on customized digitization") log of previous payments, receipts, timestamps, warranties, and contracts. This provides a much cheaper and more efficient way of tracing all interactions, whether that be B2B or between [banks and customers](https://www.financedigest.com/canadian-banks-fighting-brokers-back-for-customers.html "Canadian Banks Fighting Brokers Back For Customers").

3. Increased use of customer intelligence technology

[Customers will increasingly expect their financial providers to understand their needs and preferences](https://www.financedigest.com/walk-in-coolers-and-freezers-market-preference-for-customized-and-smart-machines-growing.html "Walk-in Coolers and Freezers Market: Preference for Customized and Smart Machines Growing"). Providers that fail to do this, will lose valuable customers. For example, banks that recognise language preference at ATM’s or on their online interface will stand out and raise [customer expectations](https://www.financedigest.com/how-omnichannel-cx-can-help-insurers-meet-customer-expectations.html "How omnichannel CX can help insurers meet customer expectations"). It is because of this that we can expect to see more companies using technology specifically [focused on actionable insights](https://www.financedigest.com/organic-fertilizer-market-where-should-participant-focus-to-gain-maximum-roi-exclusive-report-by-future-market-insights.html "Organic Fertilizer Market | Where Should Participant Focus To Gain Maximum ROI | Exclusive Report By Future Market Insights"). Central to this is the [technology behind](https://www.financedigest.com/what-is-generative-ai-the-technology-behind-openais-chatgpt.html "What is Generative AI, the technology behind OpenAI’s ChatGPT?") data analytics, allowing the financial industry to better understand their customers and employees. Data analytics will enable businesses to store useful information on customer activities across all channels. Because of this, customer intelligence is going to be the most important predictor for [revenue growth](https://www.financedigest.com/blood-bag-tube-sealer-market-to-witness-excellent-revenue-growth-overview-emerging-trends-and-forecast-by-2028.html "Blood Bag Tube Sealer Market to Witness Excellent Revenue Growth, Overview, Emerging Trends and Forecast by 2028") and profitability

4. The localisation of services through robotics and [Artificial Intelligence](https://www.financedigest.com/types-of-artificial-intelligence.html "Artificial Intelligence") (AI)

While a small handful of financial institutions recognised the value of AI technology and invested early, the majority are now catching on. Through the advances made by big data analytics, opensource software, cloud computing and fast processing speeds, customers regularly come face to face with AI, whether it’s through online banking or the investment banking system.

Through AI [technology and robotics](https://www.financedigest.com/advanced-gripping-technology-to-act-as-catalyst-to-the-robotic-gripper-market-growth-fmi.html "Advanced Gripping Technology to Act as Catalyst to the Robotic Gripper Market Growth, FMI"), banks will be able to automate various tasks at much lower costs. Previous tasks conducted by people, can now easily be carried out through robotics and AI, often at [higher quality and lower cost](https://www.financedigest.com/ds-smith-says-cardboard-box-volumes-strong-flags-higher-costs.html "DS Smith says cardboard box volumes strong; flags higher costs"). This change is going to have a knock on effect on outsource financial centres around the world.

5. Necessary Improvements in [cyber security](https://www.financedigest.com/a-culture-of-cyber-security-throughout-financial-services-organisations.html "A Culture of Cyber Security Throughout Financial Services Organisations")

The media is constantly picking up on security breaches across industries and the [finance](https://www.financedigest.com/how-to-drive-a-data-culture-in-the-finance-industry.html "How to drive a data culture in the finance industry") industry is no exception. The barrier for hackers is currently relatively low, with organisations taking up to nine months before they realise they have been breached. As cyber [security becomes a growing concern for both customers and providers we can expect this to be top](https://www.financedigest.com/the-future-of-finance-how-to-defend-against-the-top-threats-to-cloud-security.html "The Future of Finance: How to defend against the top threats to cloud security") of the agenda for financial institutions this year. Blockchain technology will have a major role to play in safeguarding against hackers and improving security as it extends security [levels beyond](https://www.financedigest.com/ecbs-lagarde-raises-prospect-of-rate-hikes-beyond-neutral-level.html "ECB’s Lagarde raises prospect of rate hikes beyond neutral level") two factor authentication.

For the financial [services industry](https://www.financedigest.com/financial-services-industry-blazes-the-trail-for-cloud-migration-post-pandemic.html "Financial services industry blazes the trail for cloud migration post-pandemic"), technology will continue to offer new ways to digitally spend, manage, invest, and protect money and investments. This transformation is forcing the entire [industry to rethink how it operates and the services](https://www.financedigest.com/three-blockchain-application-scenarios-for-the-financial-services-industry.html "Three blockchain application scenarios for the financial services industry") it provides. The implications for the financial [services industry are massive—and the opportunity](https://www.financedigest.com/hybrid-working-a-risk-or-opportunity-for-the-financial-services-industry-2.html "Hybrid working: a risk or opportunity for the financial services industry?") to act or react is now, if not yesterday.


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