Running head: PROJECT 2 FIND TRENDS IN YOUR PROFESSION

Project 2 Find Trends in Your Profession

Melvin Steward

University of Maryland University College

PROJECT 2 FIND TRENDS IN YOUR PROFESSION
2
Project 2 Find Trends in Your Profession

Introduction 

 The banking industry is one of the most dynamic industries in the world today. From

the ancient civilizations where people kept their valuables in treasures and buried them in the

ground to date where the money is stored in computerized safes, the industry has experienced

exponential growth (Blumberga & Belavska, 2019). Currently, the banking industry can be

said to be in a much healthier place compared to where it was 10 years ago during the

financial crisis. This change has been precipitated by the need to continually grow wealth

while at the same time keeping the treasurers away from 'uninvited guests'. Since the advent

of paper currency by the Tang Dynasty of ancient China in A.D 618-907, the need to secure

the money has evolved from the traditional lenders to the modern sophisticated banking

systems. Currently, banks are now more eager to incorporate better practices since they are

beginning to see the advantages of the introduction of innovations and digitizing the core

process with advanced analytics methods. According to Blumberga and Belavska (2019)

customer expectations of better financial operations have compelled the banks to look for

precise strategic focus such as the adoption of new technologies. In 2020, we can expect a

wealth of financial resources that will aim at revolutionalizingrevolutionizing financial

services (Blumberga & Belavska, 2019). 

Top Trends in the Banking Industry

 Banks have begun to incorporate traits and practices that have made the industry to

grow. Banks have now become more comfortable with faster innovations with the help of

data and analytics that have digitized the banking processes. According to Centre (2019), the
PROJECT 2 FIND TRENDS IN YOUR PROFESSION
3
banking sector is now adopting strategically measures and advancing technologically in order

to respond to the customer expectations while at the same time defending the market share

from increasing competition. The common fact about these banking trends it that they all

emphasize on the digitization of the business processes as well as reassessing the

organizational structures for future banking (DESA, 2019). These transformations are

illustrating the increasing desires of the banking system to adopt the ‘digital bank’.  The

question then begs: What influenced the change in banking and the impact thereof? The

answer to this question can be discussed in three major trends in banking that have caused

this massive change in the industry. 

1. Serving a segment of one

2. Expansion of the open banking 

3. Use of AI-driven predictive banking 

Serving a segment of one

According to Elliot, Lindblom and Willesson (2019) many banking institutions have

been targeting certain demographic based clusters such as the young people, older people, but

now some banks are targeting customers based on their lifestyles, aspirations, mindset, and

values. In 2020, it is projected that many banking institutions will be targeting to go beyond

the personalization by segment, to assume newly developed and individualized

communications and experiences for the segment of one (Elliot, Lindblom, & Willesson,

2019. The trend will be the ultimate level of innovative personalization that will give room

for digital technologies and advanced analytics. This innovative personalization will involve

clustering the customer base with a better criterion where the Customer Relationship

Management, CRM, tools will aid the banks in matching the needs of solutions in real-time.
PROJECT 2 FIND TRENDS IN YOUR PROFESSION
4
The key to proper segmentation is being able to estimate the customer’s willingness to pay

for their added value ("Effect of Service Quality on Customer Satisfaction in Selected

Private Banks (In Case of Wolaita Sodo Town)," 2019). 

Research question: with the customers expecting more than just the banks to engage

them at their "point of life" with relevant offerings and advice, in what ways do the financial

institutions offer something that has primary value and relevance to each unique customer? 

When dealing with a segmented market of the general population, there emerges the

need to have an advisory rather than a transactional relationship with the banking institution.

About 33% of the young people have indicated to be frustrated by the banks owing to the fact

that they fail to find the information and advice they need ("Frontier Topics in Banking,"

2019). Logically speaking, banks are obliged to provide the basic level of assistance to their

customers since they are the money management experts. The major problem emerges when

banks seek to segment a given target market. Among the major questions that emerge and

that banks have been unable to answer are; what information might be useful in supporting

the customer’s needs? And what would be the most ideal methods of engaging with the

customers?

The first step, in this case, would be the financial institutions having the wealth of

information about their customers, which includes the data about what they, customers do

and what they do with their money. The major that challenges that emerge, in this case,

would be putting the data to work in the support of the customer base (Laduram Vishnoi,

2019). 

In the next year, banks will realize the need to develop effective communications as

well as experienced tailored services for individual customers. This will involve the
PROJECT 2 FIND TRENDS IN YOUR PROFESSION
5
application of advanced analytics as well as other digital technologies that will allow the

process to scale quickly. The segment of one contains the advanced analytical technologies

that combine the CRM and data with other individual data that enables the bank to provide

individual digital brochures, which contains tailored services, based on the customer's

information. 

The value of serving a segment of one extends further as currently; many banks are

more concerned with disintermediation. Disintermediation can be defined as the process

where the online bank is inserting itself between the customers and the banks. This has been

an immediate concern in many western countries where open banking laws have made

disintermediation to be simpler (Laduram Vishnoi, 2019)). It, therefore, follows that the best

alternative for the banks would be to become more intermediary through offering the services

that customers need while aggregating their accounts such as insurance cards and retirements

cards in providing a better view of the financial status. 

Recommendations

It would be advisable for the financial institutions to use the in-house core application

data in analyzing the existing customer base in order to understand the interactions of the

banks with the customer. The bank could perhaps group the customers in different

segmentations of users and analyzed in order to understand the products they use and their

most common demands (Lucarelli & Mazzocchini, 2019). If the banks are able to use this

information effectively, then it would be easy for them to project the degree of certainty of

what the individual customer would be likely to want next (Lucarelli & Mazzocchini, 2019).

In addition, it would also be advisable for the financial institutions to consider offering

products that they might not have considered in the future. This would thus involve
PROJECT 2 FIND TRENDS IN YOUR PROFESSION
6
improvement management of the high volumes of data, combined with machine learning as

well as the integration with the individual financial management as well as other custom

solutions. 

When serving a segment of one, the banks would be expected to use advanced

analytics and individual financial management in order to meet the customer's point of need

and to provide the financial advice and recommend applicable solutions (Sha’ban, Girardone,

& Sarkisyan, 2019). Moreover, through the enhancement and supporting of the customers at

the individual levels, that the banks would be able to create a culture that ensures customers

are retained since they create the quality of their relationship. 

Conclusion

Among the major trends that are experienced in the banking industry currently include

serving a segment of one, expansion of open banking, and the use of AI-driven predictive

banking. For this research paper, I choose to address the topic of serving a segment of one

which involves the banks targeting customers based on their lifestyles, aspirations, mindset,

and values. The research theorem sought to answer the research question: with the customers

expecting more than just the banks to engage them at their "point of life" with relevant

offerings and advice, in what ways does the financial institutions offer something that has

primary value and relevance to each unique customer? As demonstrated, the key to proper

segmentation is being able to estimate the customer’s willingness to pay for their benefit. In

addition, perhaps the best way for the banks to ensure that they maintain their customer base

would be to become the customer's go-between, build up a reputation for customer service,

and acquire more customers. This can only be achieved if the bank is able to focus on the
PROJECT 2 FIND TRENDS IN YOUR PROFESSION
7
segment of one through delivering the ongoing value to the customer’s point of value and

leveraging the data and technology to focus on the needs of every distinctive individual

segment of one. 
PROJECT 2 FIND TRENDS IN YOUR PROFESSION
8
References

Blumberga, S., & Belavska, A. (2019). IMPROVEMENT OF CUSTOMER SERVICE

SPECIALIST TRAINING DURING MERGER OF COMMERCIAL BANKS.

EDULEARN19 Proceedings. doi:10.21125/edulearn.2019.0758

Centre, I. T. (2019). SME Competitiveness Outlook 2019: Big Money for Small Business

- Financing the Sustainable Development Goals. United Nations.

DESA, U. N. (2019). Report of the Inter-agency Task Force on Financing for

Development 2019: Financing for Sustainable Development Report 2019. United

Nations.

The Effect of Service Quality on Customer Satisfaction in Selected Private Banks (In

Case of Wolaita Sodo Town). (2019). European Journal of Business and

Management. doi:10.7176/ejbm/11-19-03

Elliot, V., Lindblom, T., & Willesson, M. (2019). The Impact of Recent Regulatory

Reforms on Cross-Border Banking: A Study of the Nordic Markets. Palgrave

Macmillan Studies in Banking and Financial Institutions, 293-319.

doi:10.1007/978-3-030-16295-5_11

Frontier Topics in Banking. (2019). Palgrave Macmillan Studies in Banking and

Financial Institutions. doi:10.1007/978-3-030-16295-5

The impact of customer relationship management on enhancing the customers loan

satisfaction in commercial banks in Cameroon. (2019). European Journal of

Business and Management. doi:10.7176/ejbm/11-12-23

Laduram Vishnoi. (2019, October 17). 5 Ways the Financial Services Industry is

Adapting to Customer Expectations. Retrieved from

https://acquire.io/blog/financial-services-industry-customer-expectations/
PROJECT 2 FIND TRENDS IN YOUR PROFESSION
9
Lucarelli, C., & Mazzocchini, F. J. (2019). Framing, Overconfidence and Regret in Italian

Mortgage Banking Litigations. Palgrave Macmillan Studies in Banking and

Financial Institutions, 137-164. doi:10.1007/978-3-030-16295-5_6

Sha’ban, M., Girardone, C., & Sarkisyan, A. (2019). Financial Inclusion: Trends and

Determinants. Palgrave Macmillan Studies in Banking and Financial Institutions,

119-136. doi:10.1007/978-3-030-16295-5_5