Trends in the banking and broader personal finance world tend to shape individuals’ lives over time.
Understanding the fastest-developing trends can help you prepare for these transitions. More broadly, it can help you make sense of some of the events you may be noticing in your own life.
Here are the most impactful trends that have been set to continue developing through 2022.
The cost of living has been long rising in much of the world. The global trend has accelerated during the Covid-19 pandemic.
In Canada, Statistics Canada has noted the areas where consumer prices are set to rise the most. Just during the last year, consumers have been paying more for groceries, especially meats.
Fresh frozen beef costs have increased a particularly high 15.4% during the last year. Transportation is another area of much faster-increasing costs, at an annual 10% increase. Overall, the consumer price index has risen 4.7% from the previous year (November to November).
The news isn’t universally bad, however. One of Canada’s most infamously high personal expenses, cellular phone plans, has dropped by a remarkable 17.9% from November 2020 to November 2021. The industry has become more competitive, offering greater promotions and bonuses, reducing overall costs for new plans.
The “Great Resignation” has caught a lot of attention recently. Indeed, unemployment, particularly unemployment due to voluntary leaving, increased dramatically during 2020 and remained somewhat high in 2021. However, there are a couple of factors worth considering now:
In the US, the ratio of unemployment to job openings has fallen back to regular levels (relative to the preceding 5 years). Right now, in both Canada and the US, there are more job vacancies than there are unemployed people.
As North America emerges out the other end of the pandemic, the following trends have already started to materialize:
Financial service providers will continue to adopt virtual and augmented reality.
In particular, VR and AR in banking will continue to pick up pace in 2022. This trend will mean improved delivery of financial services. The potential for augmented reality banking has already been partially realized.
The digitalization of banking has been a long-established trend. One negative side effect of this has been smaller, brick-and-mortar banks losing out to the bigger banks with more resources. However, for customers, this means:
Going forward, you can expect more contactless service overall.
By a similar token, Artificial Intelligence and Machine Learning will become a bigger part of finance. These are two closely related developments, although they serve different functions.
This is another development that will favor the financial institutions already at the top. Companies that have more resources at their disposal will:
This development will affect the way you interact with the financial industries regardless of the extent of your needs.
In particular, lenders will be able to provide more personalized offers, for better or worse as 88% of lenders invest more in AI. Your bank will also be able to more efficiently deliver services, as many decision-making processes will adopt AI and ML.
Perhaps most importantly, it will affect your bottom line as risk management and revenue generation are improved.
There are a few other trends that will also continue to play out but which will not be directly felt by every individual. Perhaps the best example of this is the OECD Global Corporate Minimum Tax Rate of 15%. That tax is set to kick in on October 8th, 2023, and will be an international gamechanger.
Governments are expected to have another $150 billion at their disposal due to the new tax. But for the average global citizen, the trends we’ve covered will slowly (or quickly) enter daily financial life.
At the very least, large institutional players in finance are going to work much harder to adopt the fintech developments, while every level of society will have to adapt to employment trends and rising costs.
November 30, 2022
November 29, 2022
November 28, 2022
November 26, 2022
November 25, 2022