In 2019, financial institutions are getting more and more comfortable with digital technologies, digitizing processes, embracing big data and AI, and adopting new delivery methods beyond mobile to satisfy customer demand. Although many of these technologies are not new, they dominate how the financial sector operates and grows in 2019. Add them to an already existing suite of platforms and technologies that either evolve or are replaced with new, more sophisticated solutions based on AI and machine learning. Beyond tech, all the trends of the year are customer-centric – the use of AI and chatbots, e-wallets, big data, and open banking are all meant to improve and personalize services to satisfy customer demands and expectations. As technologies continue to evolve, the trends of the year will replace outdated strategies and eventually lead to even more progressive solutions for the modern consumer

1. Financial Services Digital
Trends 2019
Carmelon Digital Marketing | August 2019

2. Introduction
Financial institutions are getting more and more comfortable with
digital technologies, digitizing processes, embracing big data and
AI, and adopting new delivery methods beyond mobile to satisfy
customer demand.
This presentation examines the movers and shakers in digital
trends for 2019. To maintain relevancy and market share,
financial institutions must adopt these technologies as soon as
possible.

3. User Behaviour Industry Statistics
According to the Digital 2019 report by Hootsuite and We Are Social, this is the percentage of the global population
aged 15 and older, reporting owning or using a financial product or service. Statistics are based on World Bank
Global financial inclusion data from January 2019.
Have an account with a
financial institution
69%
Have a credit card
18%
Have a mobile money
account
4.4%
Make online purchases and/
or pay bills online
29%
From all the users making online purchases:
• 84% search online for products to buy
• 91% visit online retail stores
• 74% purchase product online
• 42% made an online purchase with a laptop or
desktop PC
• 55% made an online purchase using a mobile device
• Percentage of women making online trasactions is
28%
• Percentage of men making online transactions is
30%

4. Top Industries Online Spending Statistics
The Digital 2019 report by Hootsuite and We Are Social also revealed the total annual amount spend in 2018
online and the top industries. Travel is the most prolific of all, followed by fashion and beauty, and electronics:
Fashion &
beauty
$524.9
billion
Electronics
& physical
media
$392.6
billion
Food
$209.5
billion
Furniture &
appliances
$272.5
billion
Toys & DIY
hobbies
$386.2
billion
Travel (+
accommoda
tion)
$750.7
billion
Digital
music
$12.05
billion
Video
games
$70.56
billion

5. 2019 Digital Trends Overview
Here’s an overview of the main digital trends shaping the financial
services industry in 2019:
• Digital wallets become mainstream. Digital wallets, typically
mobile apps, are quickly adopted by millennials, as they offer easy,
fast, and secure ways to pay and send money over the Internet.
Here, tech giants like Amazon, Alibaba, Google and others compete
directly with banks.
• On-demand, direct banking matures. Online-only banks like
Monese (UK), N26 (Germany), Pepper (Israel), Moven (USA), and
others will proliferate and grow in 2019.
• AI, conversational banking gains territory. Chatbots, messaging,
and other forms of hyper-personalized experiences are leading the
road for the fintech trends of the year.
• Big data fuels growth. Customer intelligence drives profitability and
financial institutions start using big data to give customers what they
truly expect.
• Open banking is a reality. Customers can now share financial data
with third parties safely and securely through APIs.
• Blockchain continues to grow. At a steady pace.

6. Digital Wallets Become Mainstream
A study by Zion Market Research revealed that the global mobile
payment technology market will reach USD 3,371.6 billion by 2024, at
a CAGR of 60% between 2018 and 2024, and Allied Market Research
revealed that global mobile payment transactions will be worth more
than $4,574 billion by 2023.
Considering the costs for EMV chips and magnetic stripes – and their
lack of security – it makes sense for banks and other financial
institution to turn to mobile to improve the customer experience. With
strong encription, mobiles usually offer more security than plastic
cards.
The e-wallet industry is dominated by BigTechs like Google Pay,
Amazon Pay, Apple Pay, Alibaba with Alipay, and Tencent with WeChat.
Even Facebook enabled Payments in Messenger, but the feature was
only available in the U.S., France, and the United Kingdom at the
beginning of 2019.

7. Digital wallets advantages:
• Peer-to-peer payments – services that allow users to
send money, and split tabs and bills with friends and
family.
• Personalization – e-wallets offer personalized services
and products, including automatic bill payments and
goods ordering with instant payment.
• Better customer experience – e-wallets eliminate
cumbersome banking processes with instant payments,
smoother checkout, and instant funds transfer.
• Rewards and customer loyalty – BigTechs offer
customers loyalty rewards straight into their e-wallets,
either as points or gift certificates.
• Digital diversity – BigTechs offer customers all kinds
of products including loans, travel cancelation
protection, and other services that add convenience
and enhance the customer experience.
Global e-wallets usage statistics:
• With 47% of all mobile owners using mobile wallets,
China is the world leader in e-wallets usage, followed
by Norway (42%), UK (24%), Japan (20%), and
Australia (17%).
• E-wallet payment technology market transaction value
worldwide in 2019 is expected to reach $6,109.64
(Merchant Machine)
• Mobile payments are poised to become the second
most common payment method after debit cards by
2022. (Worldpay 2018 Global Payment Report)
• Mobile share of global eCommerce – 59% (Worldpay)
• Global eCommerce payment methods by 2022: digital
wallet 47%, credit card 17%, debit card 11%, bank
transfer 11%, charge&deferred debit card 6%, cash on
delivery 3% (Worldpay)

8. Top mobile wallet providers worldwide:
WeChat Pay
1 billion
users
Alipay
1 billion
users
Apple Pay
383 million
users
PayTm
300 million
users
PayPal
250 million
users
Samsung
Pay
10.4 million
users
Google Pay
25 million
users

9. On-demand, Direct Banking
Direct banks cater to customers who expect an on-demand, digital, and mobile
banking experience. The industry is still in its infancy, but it is expected to grow
exponentially in 2019 and beyond.
These are online-only banks that offer a frictionless banking experience. Statista
predicts 157 million clients of direct banks worldwide in 2020, with 145 million in
2019.
The PACE 2019 report by FIS Global revealed that mobile and online banking
are more than a trend, they are mainstream, with mobile on the rise:

10. Direct banking advantages:
• Customer-centric experiences– banks can no longer
settle for a “one size fits all” approach to business.
Instead a strategy that puts the customer first is
mandatory to remain competitive. Direct banks already
put the customer at the center of all processes.
• Integrate AI – to deliver a unified, personalized
experience for customers, across all channels.
• Employ analytics (big data) – to understand customer
behavior and to provide intelligent banking advice and
service upgrades.
• Expedite speed to market – real time services and
processing across all channels and all devices.
• Deposit growth – speed to market, expedite customer
acquisition at lower costs, fuel deposit growth and
better deposit/loan ratios for the parent banks.
Direct banking usage statistics:
• 73% of all consumer interactions with banks are done
digitally (PACE 2019)
• 63% of direct bank customers report being “extremely
satisfied.” (PACE 2019)
• 2x as many millennials use digital banks compared to
boomers (PACE 2019)

11. Direct banks to watch:

12. AI/ Conversational Banking
Financial services employ AI and machine learning for
sophisticated uses, that boost efficiency, algorithms, pricing
engines, automated self-service, and other functions. But they also
use them to drive customer engagement and two provide instant
answers and conversations through human-like interactions.
Chatbots may employ various technologies to process information
and to develop conversations: Natural Language Processing
(NLP), Artificial Intelligence (AI), and Machine Learning (ML) are
the most advanced.
While conversational banking is still in its early days, it already
offers support for 24/7 customer feedback, and some even have
transactional capability.
The three types of chatbots in the financial sector are:
• Informational – able to provide support for FAQ and news
• Transactional – allowing authenticated users to perform
transactions, like booking a hotel room, or even payments,
transfers, P2P transactions, and deposits.
• Advisory – learning from customer behaviors to determine the
next steps.

13. Chatbots advantages:
• Customer support – chatbots answer repeatable
queries and FAQ reducing customer support pressure
and cost.
• Integrate AI, ML, NPL, analytics – learning
continuously to improve conversations with customers.
• Customer-centric – conversations are driven by the
customers and their needs.
• Individuality/ personality – organizations can define
the personality of the chatbot, making the experience
for the customer intimate, casual, and fun.
• Real time support – chatbots work around the clock,
offering answers and support in real time, 24/7.
• Omnichannel integration – chatbots can integrate
with social media messenger, website, mobile app, text
messaging services, and so on. The customer will have
a unified experience across all these channels.
Chatbot usage statistics:
• Chatbots will save businesses $8 billion per year by
2022 (Deloitte)
• The operational cost savings from using chatbots in
banking will reach $7.3 billion globally by 2023, up
from an estimated $209 million in 2019. (Juniper
Research)
• Chatbots will potentially save 862 million working
hours for banking business operations by 2023.
(Juniper Research)

14. Examples of Financial Services AI platforms and chatbots:
Finn AI – conversational AI built for banking. Used by banks like ATB Financial, Banpro, BMO,
Fidor Group, TymeBank. It has retail banking capabilities, and customer support.
interface – intelligent virtual assistant (IVA) that combines language, knowledge graph,
business logic, and response models. It has applications in all industries, from banking, to
insurance, retail, e-commerce, travel, and so on. For banking, it supports informational and
transactional servicing, also providing recommendations, reminders, alerts, suggestions to help
the customer with budgeting and goal setting.
KAI by Kasisto – conversational AI platform powering human-like conversations across all
channels - mobile, web, messaging, voice-enabled devices. Used by DBS, Wells Fargo, and
others. Supports transactional servicing like payments, account balance, status of card or loan
application, spending, and more.
Teller – messenger chatbot for financial institutions. It works with SMS, Facebook Messenger,
Web chat, WhatsApp. It supports transactional servicing, including account balance, deposits,
withdrawals, and more.

15. Big Data Fuels Growth
As digital is a mainstream channel for financial services, big data
and analytics help intuitions distance themselves from “build-it-
and-they-will-come” strategies to deliver experiences that are truly
relevant for their customers.
Big data drives the Internet of Things and helps financial intuitions
asses risks and anticipate customer demands, identifying
customer personas and new markets. It also enables them to
target customers better than ever before.
The International Data Corporation (IDC) reports that public cloud
investments are growing and, at the same time, financial
institutions invest in technology to identify cyber treats and to
address privacy issues that could arise from the use of big data.
The use of big data is, however, subject to strict governmental
regulations – which are necessary to build consumer trust and to
avoid sanctions. New regulation – GDPR and others – affect how
financial institutions use big data and analytics, but these
measures aim to benefit the consumer.

16. Big data advantages:
• Customer retention – understanding user behavior to
offer relevant products and services.
• Targeting new demographics – optimizing marketing
campaigns that fuel expansion based on big data and
analytics.
• ML building block – big data is one of the IoT
elements that fueled the leap to machine learning.
• GDPR compliance – builds trust with consumers and
avoids sanctions for financial companies.
• Fraud detection – big data, analytics, and machine
learning can be successfully employed for risk
management and cyber-fraud detection.
• Cost reduction – make better customer decisions,
eliminate inefficiencies, choose the best marketing
channels, reduce idle labor time, and so on.
Big data statistics:
• 69% of Europeans are concerned that their personal
data held by companies might be used for a purpose
other than that for which it was collected
(Eurobarometer)
• In 2018, Big Data vendors earned $9 Billion from
hardware, software and professional services
revenues in the financial services industry. (SNS
Telecom & IT)

17. Open Banking goes mainstream
In Europe, open banking was introduced in 2018 (EU
Directive PSD2) – but it’s 2019 when the concept
becomes a trend. Open banking makes deposit and
transaction data visible to third parties (applications or
APIs), but only with the consent of the consumer, who
can revoke access at any time.
According to Sonny Singh from Oracle, “open banking
allows for an end-to-end solution that provides better
visibility to global cash position, cash forecast and
liquidity forecast.”
Open banking will transform the financial services
ecosystem with application in a variety of areas,
including risk management, fraud prevention, cyber
security, analytics, and more. For now, open banking is
an emerging trend not many consumers are aware of.
Banks, however, are already investing in technology and
infrastructure to support it.
Open banking key areas infographic by PWC

18. Open banking advantages:
• Account aggregation – consumers can view all their
financial data (from different banks and providers) from
the same platform.
• Customer-centric targeting – offering tailored
services based on transaction history and anticipated
spend (like holiday loans based on previous travel
bookings).
• Centralization of services – banks can manage
advice, loans, transfers, and financing under a single
administration.
Open banking statistics:
• 84% of financial brands are already developing open
banking products (TLT)
• 71% of SMEs are expected to adopt open banking by
2022 (PWC)
• 64% of consumers are expected to adopt open
banking by 2022 (PWC)

19. Blockchain Continues to Grow
Although not a new trend – it was invented in 2008 by Satoshi
Nakamoto, blockchain technology continues to grow with
potential uses for FinTech, including lowering costs for
infrastructure – per TechJury, blockchain could reduce 30% of
banks’ infrastructure costs.
However, consumers seem reluctant in adopting
cryptocurrencies and the blockchain industry evolves as a
slower pace than initially predicted.
Nevertheless, the trend is relevant, as the financial sector has
reportedly spent a total of $754 million on blockchain in 2018.
Within the financial sector, blockchain lends itself to a number of
common use cases including regulatory compliance, cross-
border payments & settlements, custody and asset tracking, and
trade finance & post-trade/transaction settlements. (IDC)

20. Blockchain statistics:
• 35 million blockchain wallet users at the end of March
2019 (Statista)
• 90% of European and North American banks were
exploring blockchain in 2018 (TechJury)
• 0.5% of the world’s population is using blockchain
technology (Edureka)
• The global blockchain technology market is expected
to be worth US$20 bn by the end of 2024 (TMR)
• 90% of government organizations plan to invest in
blockchain technology. (IBM)
• China accounts for 25 per cent of new blockchain
projects worldwide – with 615 blockchain companies
in existence, and over 263 China-based projects in
progress (The Block)
• Worldwide spending on blockchain solutions is
forecast to reach $9.7 billion in 2021 (IDC)

21. In June 2019, Facebook announced plans for the Calibra subsidiary to
provide financial services that will let people access and participate in the
Libra network.
The first product planned for this project would be a digital wallet that will
allow users to make payments in Messenger and WhatsApp. The digital
wallet will also be available as a standalone app.
Libra is a global cryptocurrency built on a secure blockchain. The Libra
Association currently includes Facebook, Visa, MasterCard, Uber, Lyft,
eBay, Paypal, Stripe, Spotify, Vodafone and several other companies.
Facebook hopes that the association will count 100 by 2020 when it hopes
to have Calibra working for users.
Calibra and the Libra Association will follow US regulations on consumer
protection, money laundering, sanctions, and so on.
This move by Facebook and its partners supports what financial experts
predicted – that blockchain is a growing trend that may, one day, change the
way people around the world make and receive payments.

22. Conclusion
Although many of these technologies are not new, they dominate
how the financial sector operates and grows in 2019. Add them to
an already existing suite of platforms and technologies that either
evolve or are replaced with new, more sophisticated solutions
based on AI and machine learning. Beyond tech, all the trends of
the year are customer-centric – the use of AI and chatbots, e-
wallets, big data, and open banking are all meant to improve and
personalize services to satisfy customer demands and
expectations. As technologies continue to evolve, the trends of the
year will replace outdated strategies and eventually lead to even
more progressive solutions for the modern consumer.

23. Thank You!
The research was conducted by: Mihaela Lica Butler
for Carmelon Digital Marketing
More articles and researches on Carmelon Digital
Marketing website:
https://www.carmelon-digital.com