CloudSmiths Digital Transformation and Business Development Leader, Anton Kopytov
What a year 2023 has been for technology! 12 months of significant advancements in Artificial Intelligence and the widespread adoption of autonomous and cloud computing. Technology has been evolving at a rapid pace, and financial institutions of all sizes are embracing various technologies to improve their operations. This trend of increased technology implementation in the finance sector is expected to continue growing. In fact, studies have shown that 85% of financial service companies already use AI in some capacity.
But as the financial sector evolves, decision-makers face the daunting task of predicting and deciding which technologies to embrace.
The good news is that some of the burning questions that keep business leaders and decision-makers up at night have already been answered.
Artificial Intelligence will be more prominent than before.
In 2024, the banking landscape’s main goal will be to provide efficient and cost-effective support to customers and prospects. While chatbots have been around for some time, their service quality across different channels often disappoints customers, leading to frustration. However, this situation presents an opportunity for the banking industry to enhance customer satisfaction.
Enter generative AI, the superhero of the day. Unlike traditional chatbots, generative AI offers almost real-time support and can be accessed from anywhere. By relying on generative AI, financial institutions can overcome the common challenges of delivering real-time support at scale and low cost.
Additionally, generative AI provides intelligent assistance through chatbots, virtual assistants, and cognitive search. These AI-powered tools ensure that customers’ queries are answered with personalised solutions and directed to the appropriate agents with the necessary skills. By leveraging vast amounts of information from financial institutions’ ecosystems and external sources, predictive AI empowers customers with personalised decision intelligence for their financial well-being. It goes beyond simple support by offering personalised portfolio management advice and tailored product recommendations based on their unique needs and goals.
With generative AI, financial institutions can revolutionise customer support by offering seamless, end-to-end service that is functional, accurate, almost real-time, and accessible from anywhere.
It will be worth it.
It is understandable that some within the sector may have concerns about job redundancies due to automation. However, it is important to note that the integration of AI technologies will not only boost personnel productivity but also pave the way for new job opportunities. While certain routine tasks may be automated, employees will have the opportunity to focus on more creative and strategic activities. For example, they can dedicate their time to building stronger relationships with clients, developing innovative financial solutions, and providing personalised advice.
The benefits of AI technologies go beyond productivity improvements. With the help of AI, financial institutions will be able to offer higher quality financial advice, personalised product offerings, and improved communication to their customers. AI can quickly analyse vast amounts of data, identify patterns and make accurate predictions. This enables institutions within the finance sector to provide tailored recommendations and solutions based on individual customer needs and preferences. Ultimately, this will result in an elevated overall customer experience.
Moreover, automation will revolutionise mortgage processing, leading to more efficient assessment and disbursement of loans to customers. By leveraging machine learning algorithms, institutions such as banks can analyse credit risk more accurately and make quicker lending decisions. This not only benefits customers by providing faster access to loans but also reduces the administrative burden for bank employees.
Open Banking at the forefront.
The integration of banks with non-banking financial companies through application programming interfaces holds immense potential in the FSI landscape in 2024. Research shows that this synergy can lead to a deeper understanding of customer preferences, enabling banks to offer personalised solutions, products, and advice tailored to individual customers. For example, by leveraging API integration, banks can gain insights into a customer’s life stage, lifestyle needs, and shopping habits, allowing them to deliver targeted financial services.
This collaborative approach empowers non-banking partners to embed financial services within their applications, streamlining processes such as identity verification, compliance, and transactions. This not only saves time and effort for customers but also improves overall efficiency.
It’s crucial to address potential challenges associated with API integration, such as data security and privacy concerns. Financial institutions must prioritise robust security measures and compliance with regulations to ensure customer data remains protected. By partnering with trusted API providers and implementing strict security protocols, these challenges can be effectively mitigated.
You’ll be seeing this technology adopted more next year by those in the financial sector.
In the upcoming year, the combination of cutting-edge technology such as Customer Data Platforms, data lake houses, and clean rooms will empower banks to construct a comprehensive, customer-centric perspective of their financial data. This approach will enable financial institutions to offer meticulously tailored products and marketing communications, accurately measure outcomes, and effortlessly adjust strategies. This transformation will grant consumers the freedom to engage with banks through various channels, on their own terms.
No matter the technologies or trends that become prominent in 2024, it is imperative that financial institutions remain agile enough to adapt and change when necessary. However, this should only be done after a thorough evaluation. It is crucial to determine whether it is necessary to stick with current strategies or twist and adopt new technologies.
The financial sector is undergoing a remarkable transformation driven by technology and customer expectations. By embracing the potential of AI, financial institutions can enhance customer support, improve productivity, and offer personalised experiences. Open banking and API integration provide opportunities for collaboration and innovation, enabling banks to deliver targeted financial solutions. Additionally, leveraging advanced technologies like Customer Data Platforms and data analytics allows for a more comprehensive understanding of customer needs and preferences.
As the future unfolds, financial institutions must continue to stay informed and adapt to the evolving technology landscape. By doing so, they can meet the changing demands of customers and position themselves for success in the dynamic world of finance. The possibilities are endless, and with the right strategies and technologies, financial institutions can thrive in this ever-evolving environment.
