In an unprecedented year for technological advancements, the landscape of Gen AI and its impact on various sectors, particularly banking and fintech, is taking center stage. The industry is abuzz with discussions on the usability aspects of Gen AI, reflecting a robust belief in technology that has translated into substantial investments fostering an innovation culture. How will the next year fare for banks and fintechs on the technology front.
Anticipating 2024 to be a landmark year in the evolution of technology, experts foresee the convergence of groundbreaking innovations leading to immersive, intelligent, and decentralised experiences.
Generative AI in Fintech
Generative AI will play a pivotal role in tailoring financial services to individual needs and preferences. Applications include AI-powered chatbots delivering personalized financial advice, robo-advisors optimizing investment portfolios, and dynamic credit scoring offering fairer access to credit.
AI-powered Advisory and Asset Management
AI is poised to analyze user data for personalized financial advice, including investment recommendations and budgeting assistance. Robo-advisors are expected to become more sophisticated, offering customized investment portfolios, automated rebalancing based on market conditions, and democratizing financial services.
Intelligent Automation
Intelligent automation, fueled by robotic process automation (RPA) and AI, is set to reshape the banking and fintech industry. The focus is on streamlining back-office operations, reducing costs, and enhancing efficiency. Automation of routine tasks such as account opening, KYC/AML verification, and loan processing is on the rise, allowing human resources to pivot towards higher-value activities like customer service and strategic planning.
Blockchain Integration
Blockchain and DLT are expected to further revolutionize financial services in 2024. Use cases include facilitating faster and cheaper cross-border payments, streamlining trade finance processes, and enabling the development of new financial products through decentralized finance (DeFi).
Embedded Financial Solutions
The trend involves seamlessly integrating financial services directly into non-financial platforms, creating frictionless user experiences. Banking-as-a-service (BaaS), frictionless user journeys, and embedded insurance solutions are set to redefine how users interact with financial services in their everyday activities.
IoT in Finance
The Internet of Things (IoT) will seamlessly integrate physical devices into the digital realm, transforming real-time data collection, analysis, and actuation. Smart homes, connected cities, and autonomous vehicles are expected to become commonplace.
Metaverse
The emergence of the Metaverse as a shared virtual world is set to reshape industries, redefine human interactions, and blur the boundaries between the physical and digital worlds. Businesses are expected to establish virtual storefronts, host events, and provide immersive experiences, creating a convergence of digital realms.
Quantum Computing
While still in its infancy, quantum computing is gaining traction in the financial industry, promising to tackle complex problems in fraud detection, risk management, and portfolio optimization. Increased research and pilot projects exploring the potential of quantum computing are expected in 2024.
Open Banking
Open banking will continue to expand, allowing third-party providers to access financial data and develop innovative products and services. Increased API adoption and the evolution of open finance into a broader range of financial services are on the horizon.
Cybersecurity
With cyberattacks becoming more sophisticated, heavy investments in cybersecurity measures are anticipated. Focus areas include zero-trust architecture, advanced threat detection, and prevention systems, along with AI-powered cybersecurity to detect and prevent cyber threats effectively.
Sustainability
Aligning Generative AI, ESG principles, and COP28 goals can unlock a powerful combination for driving positive change. Opportunities include financing clean energy projects, promoting sustainable practices, and building climate resilience through AI-powered tools.
Digital Currencies and Tokenisation
Digital currencies, central bank digital currencies (CBDCs), and tokenisation are expected to evolve, posing both opportunities and challenges for the financial industry. Increased adoption of cryptocurrencies and stablecoins is on the horizon.
Cloud-based Banking
Cloud migration will continue to accelerate, enabling banks and fintechs to scale operations, improve agility, and reduce costs. This will also pave the way for the adoption of innovative technologies requiring powerful computing resources.
Regulatory Technology
RegTech will play a crucial role in helping financial institutions comply with evolving regulations. AI-powered compliance solutions are anticipated to automate tasks, improve data analysis, and identify potential risks, ensuring efficient and cost-effective operations.
Big Data and Analytics
Leveraging big data and analytics, banks and fintechs are set to hyper-personalise customer experiences, offering tailored products and services. Applications include fraud detection, risk management, and improved decision-making based on data insights.
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