The banking sector is under immense pressure due to growing competition from new-age fintechs, cultural shift towards a tech-first attitude, compliance with mounting regulations, new business models and dramatically changing consumer behavior.
GlobalData reveals cost reduction, open banking, new entrants, disintermediation and cybersecurity are the key challenges for the banking sector.
In a difficult revenue environment, banks must tackle legacy technology and bloated branch networks to restore profitability.
Openness means new products, new customers, new revenue models, underpinned by new forms of collaboration.
Established tech giants, niche fintech and new digital banks offer bank customers a far better digital experience, at a much lower cost, often bypassing bank regulation.
As new providers compete for customers’ attention, incumbents must take control of financial advice by enhancing the quality and usability of data and deliver personalized digital advice.
Banks’ remaining ‘barrier to entry,’ their reputation as trusted, secure providers, is eroded by cyber vulnerabilities.
Impact of Technology
Growing use of smart devices, improved connectivity and hyper-demanding customers are driving the need for digital transformation in the banking sector.
GlobalData’s innovation landscape report, “Fintech 3.0: the revolutionary impact of technology in banking” reveals digital technologies such as artificial intelligence and big data are the major drivers for sweeping transformation across the banking sector to address various challenges.
Big data, Conversational Platforms, Cloud, Mobile, and AI will enable banks to provide a more personalized, secure, and convenient digital experience at a lower cost.
AI, cloud computing, and big data can be used to maximize the data potential of open banking while speeding up prop development. Biometrics and artificial intelligence, on the other hand, will help traditional banks meet customer expectations and compete with new entrants in the market.
Technologies such as big data, cloud, and AI will help banks deliver highly personalized advice across channels at a lower cost to serve and banks can shore up their reputation as trusted, secure providers as they digitize amid openness by leveraging biometrics/security, big data, mobile and AI.
Against this backdrop, banks, fintechs and other financial institutions are betting big on blockchain as a revolutionary technology due to its real-time settlement capability, ability in reducing counterparty risk and enhanced automation, followed by AI, big data and cybersecurity.
Discover key trends, use cases, and real-world examples related to the implementation of disruptive technologies across the banking sector value chain.
Get your hands on this free report here: https://bit.ly/3sDJWZZ