While the COVID-19 crisis prompted the rapid adoption of digital channels, allowing millions of consumers to access banking services and institutions to keep up with market needs, now is no time to relax.
In 2021, it will be crucial to generate digital efficiency in all operations, make processes more flexible, reduce development times and offer better services to users in general, who are becoming more and more demanding every day.
Finastra, a global provider of software and cloud solutions for financial institutions, has set out 5 technology trends to achieve these objectives. Here is a summary.
To learn more about this or the solutions that Finastra can offer you to meet these challenges, fill out the form here.
1. State-of-the-art banking automation
Robotic Process Automation (RPA) allows taking repetitive tasks from an organization’s workers and transferring them to computer systems for execution; especially back-office tasks, such as finance, accounting, or supply chain management processes.
The most innovative solution providers have recently combined the benefits of RPA with Artificial Intelligence (AI) to create better workflows, which can significantly reduce the time spent on compliance.
The combination of these two tools has the potential to translate into significant savings for the organization, as RPA alone can reduce costs by 25% to 50%, according to the Institute for Robotic Process Automation and Artificial Intelligence.
2. Move to the cloud
Bank’s legacy systems, which for decades were the backbone of innovation in the sector, are now becoming a drag on agility. As competition in the sector grows, banks have begun to react to the speed of change and invested 48% of their technology budgets in the cloud in 2020, according to a report by consulting firm Capgemini.
Cloud capabilities (public, private and hybrid) are helping financial institutions improve their development times, especially through APIs to connect legacy systems to microservices platforms, in a matter of days rather than months.
This opens opportunities for institutions to improve their user interfaces quickly, while investing in the migration of their architecture to the cloud.
3. Open Banking is the future
Most banking institutions will have better returns on their investment if, instead of developing their own cloud-native APIs, they leverage the capabilities of open banking and seek partnerships within the ecosystem, where innovation tools are continuously developed to drive deposit and loan growth.
Open banking also works in two ways. Banks can place their products in other company’s apps, to retail giants, fintechs or gig economy platforms the facilities to channel transactions.
So, without the need for service contracts or costly procurement processes, institutions can easily adopt new products as needed and multiply their market presence.
4. Data analytics to boost growth
It is increasingly necessary for financial institutions to make accurate, real-time assessments of their potential and the needs of their customers. Accordingly, AI and machine learning provide information, both descriptive and predictive, to anticipate trends, detect user demands and provide personalized services.
New analytics solutions can obtain and process large pools of information from internal and external sources, such as payment systems, enabling them to paint more accurate diagnostic pictures.
5. Preparing for new regulatory processes
AI and machine learning tools are constantly being updated and “learning” new patterns, proving especially useful for defending the security of institutions and identifying cybercrime threats in real time.
Considering this, it is quite likely that many regulatory authorities will begin to require the use of these tools given the rise of digital products, which have also driven the rise of data breaches, cyber-attacks, money laundering and fraud.
To read Finastra‘s full report on trends for retail banking, click here.