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Commercial Lending

Fintech and Payments Trends to Watch in 2018

Dave Foss
Jan 17, 2018

Blog-2018-01-17Financial services have recently been in the national spotlight for everything from crypto currencies to data breaches – and a lot more in between. There is a shifting focus toward an enhanced customer experience, automation and security that has ushered in many new and interesting technologies. As the industry continues to keep pace with change and disruption, financial institutions must sift through the hype and pay attention to the most impactful and relevant technology movements in order to remain competitive. Below are some areas to watch in 2018.

Channel Strategy

Today’s highly competitive landscape coupled with consumers’ rising digital demands requires financial institutions to adopt a more comprehensive and diverse channel strategy. In 2018, digital account opening tools will become a top priority for financial institutions, and an advanced digital onboarding offering will become table stakes by 2019. Banks and credit unions will work to deliver a simple digital process that provides account onboarding as well as easy access to customer service through online agents and call centers.

The rise of self-service in banking will also persist, making digital elements even more prevalent in branches. Tablets, digital signage, and interactive teller machines (ITMs) will increase in both adoption and use cases. As self-service grows, regional and community institutions can differentiate themselves by incorporating a personal user experience in their digital services. A relationship-based experience will be driven through a more conversational workflow, allowing for more sophisticated services to be offered away from the branch.


Commercial lending continues to be an area of frustration among community and regional institutions, as their processes often remain disparate and cumbersome. This year, banks and credit unions will take advantage of new workflows and automations that enable them to offer the fastest paperless commercial lending options. Such efficiencies will allow bankers to manage the entire life-long customer relationship, incorporating the ability to seamlessly offer new loans and services that solidify profitable relationships.

An accelerated adoption of CECL solutions will automate more lending reporting as the compliance date draws even closer. Financial institutions should strive to run their CECL solutions in parallel with their current ALLL for 18-24 months prior to their go-live date to ensure a smooth transition. 

Risk and Security

As cyberattacks continue to expand in scope and sophistication, cybersecurity will remain a major area of focus this year. Financial institutions will place heavy emphasis on multi-factor authentication and their cyber resiliency and breach protocols to better protect customers. Institutions will invest in new solutions to mitigate risk such as early incident detection solutions. Also expect to see financial institutions conducting more thorough and consistent incident response testing in conjunction with business continuity plans. 

To make these cybersecurity efforts manageable, more financial institutions will augment information security officer positions through outsourcing. It’s often challenging and costly to find the talent necessary for such a critical role; by outsourcing the position, banks and credit unions will be able to benefit from top expertise more easily and cost effectively. Institutions that require information security officers to wear multiple hats, including managing IT, will lead the early majority.

Real-Time Payments

Both P2P and real-time payments will continue to gain momentum in 2018. The Clearing House will keep expanding its RTP network, nearing the point of critical mass. Zelle will also gain momentum and begin to demonstrate results for its partners in the P2P payments space. Expect to see Zelle grow beyond just P2P and provide valuable new use cases in B2C and C2B. Financial institution-based P2P payments will become more user friendly and socially engaging to compete with non-bank competitors such as Venmo, Apple Pay, and Facebook.

As real-time payments make significant progress toward reaching ubiquity within the next two years, the industry will start to adapt a real-time banking infrastructure. Consumers don’t only expect instant service from payments, but all aspects of their banking experiences. Savvy financial institutions will provide capabilities that are well aligned with the evolving expectations of financial institution clients and how they want to do business.


As technology continues to advance, we’ll see institutions experiment with new, innovative ways to bank.  Artificial intelligence (AI) capabilities will move from the planning stages into deployment. Financial institutions will likely first explore engaging with customers in a more impactful way such as using bots for conversational commerce. Fraud prevention will lead the way from a cost savings perspective.

There will be an increase in use cases for distributed ledger technology this year as financial institutions collaborate with various tech companies and networks to develop permissioned blockchain. Common examples will include cross-border payments, smart contracts, and loan onboarding and decisioning.

To support these evolving areas of financial services, more banks and credit unions will partner with financial technology companies to help them successfully navigate the changing waters. There are simply too many shifts occurring and initiatives building for most institutions to handle on their own; it will be critical in 2018 and beyond to find trusted partners that can help institutions strategize, remain relevant and successfully compete.

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