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The shift to remote schooling, working and online retail has pushed the development of innovative new technologies and there will continue to be a steady stream of new fintechs and service providers entering the marketplace, adding to an already competitive environment. By necessity, this will encourage more and closer collaboration between providers and financial institutions to ensure that service offerings align with customer needs and expectations.
Institutions not necessarily looking to acquire others or be acquired themselves will likely reinvest some of their 2020 profits into new technology and infrastructure upgrades. In particular, community financial institutions will be carefully evaluating their payments infrastructure to ensure that they are positioned to support the future demands of real-time payments, embedded payments and faster payment capabilities that programs like RTP® and FedNow℠ promise to deliver.
In fact, community financial institutions will continue a shift that is already underway from large, inflexible, legacy technology to more modular, user-friendly, API-enabled technology that allows them to more quickly respond to changing market dynamics while providing customers with a modern user experience. This will likely manifest itself in the form of “no-code” or “low-code” cloud and/or micro-services technologies that will serve as the platform for financial institutions to continue to innovate and experiment as they work to better cultivate and grow meaningful customer relationships through the digital banking channel.
If the experience of 2020 demonstrated nothing else, it is that adaptability and responsiveness are going to be the keys to success for financial institutions moving forward. For the financial services industry, one positive that has emerged from the experience of 2020 is the substantive gains made toward better serving customers.