What technologies make a difference for Banking 2024?

Financial activities like transferring money, making payments, and applying for loans can happen easily within the apps and platforms they already use. Visiting a separate banking website or app may become less important.

The combination of high technology and high-touch personal connections will define the customer-centric banking experience of the future. As banking evolves over the coming year, maintaining an unwavering focus on people as well as technology will open up limitless possibilities to improve financial lives.

Implementing digital transformation is an attractive prospect for banks, promising to increase the pace of innovation. However, this transformation journey requires addressing the challenge of untangling complex, aging infrastructure and eliminating data silos that have long isolated valuable information.

Invest in vision: The cost is not cheap, but the value is unlimited

Upgrading to modern technology requires significant investment over many years. According to S&P Global, leading banks are expected to allocate more than $200 billion to technology initiatives between 2022 and 2025. Key areas of focus include shifting to cloud-based infrastructure, Unlock APIs to enhance interoperability and modernize outdated core systems.

Additionally, harnessing data-driven insights into customer needs is paramount. By deploying advanced analytics, banks can better predict and respond to customer requirements, moving away from the historical guesswork that characterizes their service delivery.

Transition to agile technology: Traditional mainframe systems have long been the bottleneck for agility and innovation in many banks. Migrating core infrastructure to the cloud delivers transformative benefits, including on-demand scalability, rapid deployment of new software, and built-in resiliency.

Accenture research shows that leading banks plan to invest more than $60 billion in cloud adoption by 2025 - plus, cloud banking platforms offered by fintechs like Thought Machine promise promise to innovate even faster.

Open APIs represent another important technological advancement. They enable seamless integration with fintech partners, facilitating the delivery of new digital experiences at a faster pace.

Today, many banks are facing challenges from legacy technology systems, causing delays in implementing new services compared to flexible and agile competitors in the market. Aware of this situation, some banks are being very proactive by expanding their capabilities through the use of application programming interfaces (APIs). Thereby promoting innovation and enhancing customer experience.

Leverage data and AI: Despite the huge amount of data available, many banks are still not leveraging its full potential. Applying artificial intelligence (AI) and machine learning to transaction history, customer demographics, and market trends allows banks to hyper-personalize services and predict customer needs. Advanced analytics will also enable banks to assess risk more accurately, reduce manual processes and increase employee productivity.

Leading banks have invested significantly in data science talent. For example, JPMorgan Chase has more than 50,000 technologists and has hired thousands of data scientists. Refinitiv estimates that AI spending by financial firms will exceed $7 billion by 2024. However, progress in leveraging AI and data analytics depends not only on raw technology but also on depends on effective data governance and cultural change within organizations to support data-driven decisions.

Accelerating innovation: The future of banking will be marked by rapid innovation, driven by the rapid development of cloud platforms and APIs that enable banks to experiment and iterate at speed never seen. Thanks to the testing environments developed and provided by technology giants such as Google and AWS, as well as fintech companies, will allow banks to test new ideas and concepts without encountering unnecessary risks. Real-time usage data and behavioral analytics will become powerful tools for personalizing services and offers to meet customers' individual needs.

Advanced technologies such as quantum computing, predictive analytics and blockchain-based programmable money will play a key role in driving operational efficiency in banks. By 2024, these technologies could become industry standards, allowing banks to provide customers with more advanced and efficient services. Additionally, emerging concepts such as the metaverse can open up virtual financial scenarios, allowing customers to make real-life financial decisions, such as buying a home, in a simulated environment. The bank of the future will strive to bring today's emerging technologies into the mainstream, enhancing the customer experience.

Reference source: The Financial Brand

Compiled by the DTSVN author group - Digital transformation solutions for the Finance and Banking industry.

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