2022 was an eventful year in the UK. From the ongoing cost of living crisis, to rising inflation rates and the fall of the London Stock Exchange as the most valuable European stock market, 2022 has been anything but easy for the UK economy. At the same time, recent innovations in finance present an opportunity for the UK to further modernise, ultimately contributing to the growth of the economy. This article will break down which finance trends we predict will dominate 2023.
Digitalised financial services
Ever since the pandemic, the use of digital banking has skyrocketed around the world. This trend isn’t going away any time soon. As consumers increasingly opt for digital channels with strong customer experiences, more banks will be expected to expand their digital services in order to keep a competitive edge. This shift is transforming the banking industry as we know it. The adoption of digital financial services has a number of benefits; it’s more convenient and efficient for customers, it gives more people access to banking services, and allows users to have greater control over their finances.
As more banks move to the cloud, blockchain technology will become increasingly relevant. More financial institutions are seeing the value of adopting blockchain considering the efficiency and security this technology can provide. This is due to the use of smart contracts, which have a number of benefits that supersede traditional contracts. Smart contracts are signed using cryptographic keys, where then the contract is encoded into a computer language. This make it practically impossible for anyone to tamper with or breach the authenticity of the contract, and allows for transactions to occur more quickly and easily.
Cybersecurity attacks have been steadily increasing since 2020. As more businesses in the finance industry undergo digital transformation, the risk of cybersecurity hacks increases. According to research by the Bank of England, cyberattacks are the biggest threat to UK financial system, with less than half of financial institutions believing they are equipped for a cyberattack. Businesses need to act now by upgrading their security systems and hiring more employees with the necessary skills to fend off these attacks.
Artificial Intelligence (AI)
The use of artificial intelligence has ramped up in the financial sector, as it has aided in the automation of certain processes, freeing up time for employees and saving on operational costs. In 2023, we expect that companies will expand the use of AI to play a greater role in major business decisions and become more integrated within companies’ digital infrastructure. AI is already being employed by financial institutions for things such as chatbots, personalised customer service, algorithms to detect errors, etc.
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