Banks across the world are already on the path of digital transformation and the focus in 2019 is how to hasten the journey, with open banking and API-led business models playing important roles, according to an annual banking trends forecast for 2019 released recently by Infosys Finacle.
The report also observed that “technology and business outcomes will become more tightly coupled, as banks evolve their architecture for emerging digital technologies and new open banking realities”.
Infosys Finacle, a digital banking solution from EdgeVerve Systems, works with banks in a hundred countries. Using the groups experience and opinions of subject matter experts, the report was able to capture twelve business and technology trends that will influence banking in the coming twelve months and beyond.
Tech trends for banking
1. Accelerating architectural evolution
Banks will adopt the principles fostered by deep business focus, true agnosticism, pervasive analytics, open source, and comprehensive automation as architectural principles to reach new levels of agility, scalability, and resilience.
2. AI in banks
The benefits of AI in customer service and fraud management use-case will expand. The technology will be further applied on compliance, precision marketing, and talent management.
Its use cases in banking will grow, and large networks will become important for meaningful value.
4. Steady advance towards public cloud
Public cloud will rise as the preferred choice of tier 2 and tier 3 banks looking to expand their operations. API-driven business initiatives and new digital channels will help push adoption.
5. Accelerating connected commerce
A lot of banks will offer basic banking using smart voice-assistants, while IoT adoption will ramp up in the trade finance and lease financing business.
6. Increasing interactive dimensions
Banks will lead use cases of mixed reality (MR) such as virtual branches, and mobile applications enhanced by MR.
Business trends for banking
1. Transition towards platform business model will accelerate
Marketplace-driven banking will take over the traditional vertically-integrated pipeline business model where banks create and sell their own products.
2. Customer journeys will advance to the point of primary intent
Banks will create journeys that begin when a customer ponders purchasing an asset, not when he or she is seeking a loan to finance the asset.
3. Open banking
As banks reveal more APIs, they will evolve their API strategies and align them closely with business and strategies. However, banks and FinTechs will continue to wrestle with the challenges of multiple API standards for a period.
4. Cyber defence vs. hacker intelligence
Banks will strengthen their security and invest significantly in security talent, tools and expertise to combat the rising threat brought by evolved hacking techniques.
5. Optimising digital-human interplay
Banks will welcome talents outside banking in order to become more diverse as industry boundaries continue to blur.
6. Data privacy and ethics
As banks balance the responsibility of sharing customer data for customer-centric purposes and protecting customer interest, they will find themselves taking a new role of facilitating the secure exchange of customer data with third parties.