Banking trends: Disruptions and innovation

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Banking trends: Disruptions and innovation

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The banking sector is experiencing significant changes primarily driven by the growing integration of technology into consumers’ daily lives, evolving customer expectations, increasing interest in digital money and the volatility of cryptocurrencies. The potential annual value of AI and analytics for the global banking industry is expected to be as high as $1 trillion.

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What’s inside

  1. Key takeaways
  2. Key drivers shaping trends in banking
  3. Business trends driving innovation
  4. Technology trends aiding the business

Key takeaways

  • Changing IT spend- IT spending in banks is shifting from Capex to more.
  • Opex, with significant shifts to Cloud.
  • Future of banks- Neobanks can play a crucial role in addressing and responding to all the key drivers.
  • Rise of fintechs-The emergence of fintechs is shaping business trends and expanding the range of choices available to customers. Studies indicate that from now until 2028, the growth rate of fintech companies is expected to be three times that of the banking industry as a whole.
  • Impact of emerging technologies- New technologies like GenAI, Blockchain, IoT are likely to cause banks to change the way they work and will influence the majority of the business.
  • Cybersecurity resilience- Cybersecurity is evolving from being solely a technological concern to becoming an important consideration for new business strategies.
  • Sustainability increases in priority-While Sustainable finance enables banks in financing sustainable projects for other businesses, banks must also prioritize making their own operations sustainable. Download Complete Research

Key drivers shaping trends in banking

  • Customers want personalized, convenient, and seamless banking experiences. Over 60% of banking executives report rising customer experience expectations, with 45% struggling to keep up.
  • Fintechs are revolutionizing banking with mobile apps, online lending, and personalized experiences using AI. By 2030, they will be constituting 25% of all banking valuations.
  • To address environmental risks and foster responsible economy, banks are focusing on sustainability. Banks representing 41% of the global banking assets have joined Net-Zero Banking Alliance.

Business trends driving innovation

  • A lot of the trends are reflecting the move to extended value chains or ecosystems thinking.
  • Technology platforms support a lot of this, and banks and financial service providers are seeing the benefits of these.
  • BaaS allows third parties to connect with a bank’s API infrastructure to build and integrate products.
  • With automation, banks can now reduce their lending processing time from weeks to a couple of days.
  • Neobanks can operate on a low-cost model, which can be instrumental in improving the accessibility of banking services.
  • With Open Banking, banks can now open online accounts in just three minutes, 100 times faster than before.
  • These banking trends impact various stakeholders, including customers, regulators and government bodies, employees, technology providers and fintechs.

Technology trends aiding the business

  • Banks can leverage AI to gain deep insights into their customers and the financial ecosystem, identifying new fraud patterns and money laundering strategies using synthetic data.
  • Banks are migrating their analytics platforms to the cloud for complex banking analytics. Data marts are being used to store and perform analytics on sensitive bank data.
  • Recent developments in cybersecurity in banks, like Zero Trust Architectures and Adversarial ML, help train ML models to be more resilient to attacks and increase cloud adoption.
  • Blockchain technology in banking promotes secure digital transactions, cost reduction, decentralization, and anonymous financial activities while ensuring accountability.
  • IoT implementation helps to monitor each customer touchpoint in realtime when they bank, enabling banks to offer more relevant services and identify fraudulent activities faster.

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Credits
Lead Authors@lab45: Deepika Maurya, Chandan Jha
Contributing Authors@lab45: Sujay Shivram, Hussain S Nayak

Latest stories

Future of connected world with AIoT

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11:45 Minutes The average duration of a captivating reports.

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Future of connected world with AIoT

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AIoT is a revolutionary blend of AI and IoT that creates a connected world with limitless opportunities. Smart devices can collaborate to make informed decisions without human intervention, transforming various industries. As AI and IoT converge, their applications will become more advanced, presenting new prospects for businesses and consumers.

What's inside

  1. Insights and technology trends
  2. Overview, benefits, and architecture
  3. Use cases, challenges and key players
  4. Enterprise AIoT adoption strategy

Insights and technology trends

  1. AIoT enables devices to become smarter and more autonomous by analyzing massive data streams in real time and making informed decisions based on that data. They are expected to become more personalized and intuitive by implementing self-learning algorithms, providing real-time solutions. 
  2. Fast, reliable connectivity ensures seamless user experience and data exchange, allowing AIoT systems to respond and act promptly.As cybersecurity technology advances, users gain confidence in the security of AIoT systems.
  3. AIoT can contribute to sustainability initiatives through intelligent monitoring and control systems.
  4. Integrating new technologies in AIoT systems has become an essential component in the future of enterprises and individuals. Key Technology Trends include:  Secure Access Service Edge (SASE), Nanotechnology, Multiplicity, Contextual Proactivity, Seamless Multi-Modal Interaction, Brain- Computer Interfaces.

Overview, benefits, and architecture

AIoT combines sensors, AI, data and ambient computing elements to create a responsive, context-aware environment. It uses embedded devices and natural user interfaces to provide services based on detected requirements and user input.

AIoT can revolutionize how users interact with technology, offering greater convenience and seamless connectivity. The benefits include: intuitive and seamless experience without commands, automated decision making, efficiency and convenience.

While creating an AIoT system, a well-balanced architecture is crucial to manage data processing speed and costs. There is a flow of information in the system based on the external inputs, that ultimately results in a response based on analysed data points by AI and ML algorithms. Download Complete Research

AIoT adoption – Connected enterprise strategy

The 5 step enterprise strategy include the following:

  1. Define AIoT Vision, scope, goals and objectives
  2. Assess IoT Capability, identify AIoT devices & systems
  3. Define Connected enterprise System Architecture
  4. AIoT System Development & Pilot implementation
  5. Enterprise - wide implementation

Use cases, challenges and key players

Use Cases for following domains are discussed:

  • Manufacturing: Employee safety, Inventory management, Collaborative robots (Cobots), AI-driven product design
  • Smart Homes: Home Security, Health and Wellness, Child and Elderly Care, Home Automation
  • Healthcare: Predictive Healthcare, Smart Wearables
  • Automobile: Autonomous Vehicles, Smart Traffic Management, Connected Car Services
  • Retail: Smart Shelves, Customer Experience, Ambient Commerce
  • BFSI: Fraud Detection, Personalized Financial Services

Implementing a complex system like AIoT requires careful planning, collaboration, and attention to detail. Data management, privacy concerns, and integration with various systems can pose significant obstacles to successful implementation.

The AIoT space is dominated by key players such as IBM, Microsoft, Siemens, GE, Cisco, Huawei, ABB, Bosch, SAP, and Honeywell. Download Complete Research

Credits
Author@lab45: Anju James
Contributing Authors@lab45: Hussain S Nayak, Nagendra Singh

Top trending insights

Should govt issued IDs be decentralized?

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Should govt issued IDs be decentralized?

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Foundational for identity verification and rights access, government-issued IDs face breaches and inefficiency within centralized systems. Enter Decentralized Identity solutions, redistributing verification control to individuals. But is it applicable for equally for all government services?

What's inside

  1. Decentralized vs Centralized ID for governments
  2. Identity credential issuing process today
  3. Suitability of government functions to Decentralized Identity
  4. Long term outcomes

Decentralized vs Centralized ID for governments

Decentralization of government-issued IDs is a complex issue with potential benefits and drawbacks. Whether government issued Ids should be decentralized or not depends on various factors that we delineate. Any decision on decentralization should be carefully considered and implemented with caution to ensure that they do not breach security or undermine the government’s programs. Download Complete Research

Identity credential issuing process today

Govt Identity Credential Issuing Process
Govt Identity Credential Issuing Process

We detail out the current Issuing process typically followed by governments today and identify several challenges and issues that face it today. This includes Ids like the Passport, Licenses, Voter cards and Social security cards. All of them are critical and everyone can do with an easier and more fool proof process for the same.

Suitability of government functions to decentralization

We evaluate the different government functions such as Education, healthcare, elections, security, taxation, etc and analyze which of these would be most suitable to be decentralized. We map them on a matrix of Complexity & Coordination and the Need for scrutiny to give us an easy framework for assessment. Download Complete Research

Long term outcomes

We end by considering the long term onjectives and intended outcomes of such an exercise.We feel that Decentralized Identity solutions can rebuild trust in public institutions by empowering residents with data control.

Credits
Author@lab45: Sujay Shivram, Abhigyan Malik

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