Digitalization Trends that Are Impacting Banking
Atos conducted research which indicated that there are four opportunities and challenges in the banking sector over the next four years. Here are those trends.
The Need to Respond to Customer Needs
In the last 4 years, digital banking report conducted research and the response to customer needs was ranked as the most important trend. Financial institutions need to switch their physical interactions to more digital engagement. Credit unions and banks that use digital customer journeys conceived greater cost reductions, benefit in revenues, and more customer satisfaction.
Optimization of Their Costs
Banks and credit unions need to consider leveraging intelligent automation and divesting their non-core operations because of the competition of digital technology. they need to look to replace their aging infrastructure and reinvent their back-office practices.
Create More Revenue Streams
The use of APIs and open banking creates more revenue growth and reduced costs. As the ecosystem of banking moves beyond traditional banking services, new segments and new products will be developed. These will provide modernization opportunities and additional offerings for customers.
Compliance Systems and Security Development
Customer data is now a product for many financial institutions, and there needs to be enhanced security for this data. AI or Advanced Insights will become a differentiator in both the customer trust perspective and from a compliance standpoint.
Furthermore, Altos also developed the Global Banking Technology Radar that is very helpful. This provides a perspective on the various technologies over the next five years that are anticipated to be adopted. It looked at the timing of the integration of these technologies and how they are going to impact businesses.
1. The Hybrid Cloud
IBM Indicates that cloud computing has gone mainstream in banking. Many banks are looking for a mix of private and public clouds as well as traditional IT. Over time, additional banks are going to move to more enterprise-wide hybrid cloud strategies. They found that around 75% of bankers had created new revenue streams, expanded into new Industries, and created more products or services because of successful cloud initiatives.
2. API Platforms
Open APIs and open platform banking combination are transforming the banking ecosystem and customer experience. Underlying partnerships, delivery channels, services, and products are going to be shaped by this technology in the future. Public APIs is also going to provide customers with more options as they interact with their bank.
3. Artificial Intelligence
Business needs and the capabilities of artificial intelligence has heightened interest in it. Both unstructured and structured data has experienced explosive growth lately. New technologies like machine learning algorithms, cloud computing, and the pressures of new competition have heightened consumer expectations and increased regulations that are requiring more use of artificial intelligence in the financial services sector.