Financial trends in 2018: What you should know

Often, we prepare a plan for what we want to do in a year right at the beginning. We set new goals to enhance our lives in different aspects such as money, career, relationships, health and more. Among these, financial goals are extremely important.

Let us now discuss some of the essential financial trends that you should be aware of in the year ahead. This may help you plan better for the future – at least for 2018:

Customer experience will improve

One of the primary focus area vis-à-vis financial trends in 2018 will be on improving customer experience by offering them personalised financial services that include checking accounts, savings deposits and mortgage.

Customers today expect seamless and simpler digital experience, therefore banks must re-imagine their fundamental journeys from front to back by trying to solve key customer concerns and identify new opportunities to offer a better customer experience.

Stock markets might have a dull year

As interest rates are inversely proportional to market valuations, stock markets are not likely to have a great year. When interest rates are down, investors rush to the stock market to pursue higher returns. However, when the rates return to regular levels, investors shift their cash out of the market into other assets that offer a suitable level of profit.

It is also quite likely that the market will continue to rise in 2018. However, it is important to note that many market indices have been at the top in the past couple of months. As market cycles often go up and down over a period, it is advisable invest more carefully in 2018.

Role of Advanced Analytics, Artificial Intelligence and Big Data will reach the next level

Data is expected to be the base for many predictions and trends in 2018. As consumers are showing a willingness to share personal information and banks are also gathering data, the role of analytics will be huge. However, the banks have to do a lot more such as delivering customised engagement, tailored services and financial advice, so that the whole process turns out to be beneficial to the consumer.

Interest rates will rise

The US Federal Reserve has announced its decision to hike the interest rate. US Dollar has a big influence on the Asian market, especially on the export business. Asian governments try to keep a stable exchange rate to the dollar. As a result, the Asian market is also likely to see a rate hike.

For consumers, the major implication is that with rising interest rates, they will have a higher debt repayment burden. In Singapore, as a large share of consumer debt has a floating interest rate, the cost of these debts will only rise as the market rates go up. As a result, consumers will have to work towards lowering the burden of loans.

Fintech firms and banks will join forces

In 2018, there will be more collaboration between financial services and fintech companies, distorting the lines between conventional products and the convergence of technologies such as Internet of Things and cognitive computing. Though fintech companies have the advantage of making the first move, they still lack scale when it comes to providing customer-centric solutions at a low cost. This is because banks continue to have a positive image among people in an important foundational field – which is trust.

However, with many consumer demands still unmet in digital banking solutions, there is a good chance for fintech companies and banks to work together and make the most of each other’s strengths.

Cryptocurrencies will continue to make its mark

Bitcoin and other cryptocurrencies are likely to continue to be in the news in 2018. Everywhere people are discussing about Bitcoin, but people are still clueless as to how its value varies. As per many experts, Bitcoin’s value is likely to rise this year. However, as a consumer, it is highly recommended that without having clear know-how about the cryptocurrency, purchasing it would be a gamble and not an investment.

As a consumer, these financial trends help you figure out a way to plan your loans and investments. We hope this article has been of some help to you. May you have a fruitful 2018!