The up-tempo rate of the banking industry’s ongoing embrace of technology — specifically hyper-automation and AI integration — shows no signs of slowing. FinTech magazine’s editor Louis Thompsett provided a mid-year 2024 update on global progress.
Evidencing the progress made, Thompsett cited a December 2023 prediction by Frodo Berg. Berg is Managing Director for Europe, Middle East, and Africa at Provenir, a New Jersey developer of risk-decisioning software. Berg predicted that hyper-automation and AI integration would “…empower financial institutions to streamline their operations, boost efficiency and harness the power of data analytics.”
Current financial services activity shows that prognostication coming to fruition, as legacy banks make significant strides in digital transformation.
Leveraging Bank Data for Customer Success
Peter Pugh-Jones is Director of Financial Services at Confluent, a Mountain View, Calif., cloud-native platform that enables real-time data streaming and processing.
He emphasizes that banks are “fundamentally data companies: really, data is their ‘product,’ rather than the agreements they enter with customers.” Pugh-Jones further notes that this shift in corporate identification is essential for leveraging data effectively to meet customer needs.
The Power of Bespoke Messaging in Banking
Shilpa Doreswamy, Head of Banking at GFT UK, notes the impact of bespoke messaging for fostering bank relationships. She states, “The creation of hyper-personalized customer experiences through the use of AI and advanced data analytics to provide tailored financial advice, offers, and customer support.”
Specifically, she cites that AI and machine learning are becoming crucial in:
- Customer acquisition
- Personalized product recommendations
- Real-time fraud prevention
- Process optimization
Gradual AI Adoption for Streamlined Operations
BRD, the parent company behind a consumer wallet and a B2B SaaS product, exemplifies this transformation by gradually introducing AI to streamline operations. Maja Mikic, BRD’s Executive Director for Digital Transformation, explains, “AI is being introduced on a small scale, meaning we have a very consistent path ahead.”
Decentralized Finance (DeFi): Reshaping the Banking Landscape
The rise of decentralized finance (DeFi) is another significant industry trend.
Prakash Pattni, Global MD for Financial Services Digital Transformation at IBM, highlights the migration toward central bank digital currencies (CBDCs). He states, “This is shifting the focus away from cryptocurrencies and towards DeFi becoming mainstream.”
Brazil’s Pix, a real-time payment network launched by the central bank, exemplifies this change. Its use rose by 74 percent in 2023, facilitating 42 billion payments.
For insights on boosting customer service and the rise of decentralized finance, read the full story on FinTech magazine about the banking industry’s digital transformation, fueled by data and AI, which is revolutionizing how banks operate and serve customers.
