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

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Web3 & Crypto tokens

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Web3 & Crypto tokens

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Discover the revolutionary world of Web3 in this compelling paper, where we delve into its fundamental building blocks and crypto tokens that underpin this decentralized paradigm shift. Explore the exciting enterprise use-cases harnessing the true potential of Web3 technology, revolutionizing industries and unlocking unprecedented opportunities.

What's inside

  1. Web3 and it’s building blocks
  2. The Web3 adoption
  3. The role of the enterprise in Web3
    a) Business models around Web3 and major players
  4. Regulatory and technology risks

Web3 and it’s building blocks

Foundation Blocks Of Web

Web3 represents a decentralized web powered by blockchain, enabling decentralized participatory communities. It promotes user control over data, governance, and transactions. The transition from Web2 to Web3 encompasses decentralization of user data and content, finance and currency systems, and immersive user experiences. Web3 leverages crypto tokens, digital assets issued on blockchains, and utilizes smart contracts for decentralized finance. These tokens are essential for Web3 and its growth. Web3's potential lies in building digital communities, disrupting economic representation, and co-creating value within token networks. Blockchain underpins Web3, ensuring secure transactions and smart contracts. Non-Fungible Tokens (NFTs) play a role in ownership and provenance of digital assets.

The Web3 adoption

The growth of crypto markets until 2021 was remarkable, but the web3 community remains relatively small. By November 2021, about 7 million people were using token wallets monthly. Crypto is volatile, with fundamental flaws and regulatory challenges. The complexity of web3 poses risks in regulation, technology, and security. EU, USA, and China may not fully support crypto. However, digital tokens can still find a counterculture of users valuing crypto custody and communities. Web3's potential to benefit the public is uncertain. Adoption paths vary, and tokens could disrupt traditional systems, but regulatory hurdles and fraud might impede progress. VC investments in web3 exceeded $18 billion in H1 2022, indicating significant interest and potential. Download Complete Research

The role of the enterprise in Web3

Tokens are most impactful when they unite micro-communities to create long-term value. However, many token projects remain immature and fail to generate value due to the absence of robust economies. Centralized enterprises and their brands could play a significant role in web3 by building token ecosystems around their communities, blurring the line between utility and investment. Brands can use NFTs for reinvented customer loyalty programs and create DAOs for crowdsourcing productivity. Successful token development depends on an engaged community, and brands can incentivize fans to participate actively. Notable brands like Nike and Starbucks are already exploring web3 and NFTs. Mainstream and decentralized brands are recognizing the potential of engaging with digital-native fan communities in the web3 space. Download Complete Research

Regulatory and technology risks

Web3's tokens hold enormous potential but also significant risks. Users are responsible for token custody and must secure them cryptographically. Cybercrimes can lead to substantial financial losses. Token fraud and money laundering are concerns due to anonymity. Regulatory challenges are growing, with potential impacts on tax codes and transactions.

Credits
Author@lab45: Ankit Pandey

Top trending insights

Manufacturing trends: Disruptions and innovation

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Manufacturing trends: Disruptions and innovation

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Manufacturing is becoming more smarter, efficient, precise, and sustainable by adopting IIoT, AI, Robots, Blockchain, and 5G for operations optimization. Manufacturing business trends are enabling flexible & transparent supply chains, customer-centric & agile production, ecosystem collaborations, and new business models.

What's inside

  1. Key Takeaways
  2. Key drivers shaping trends in manufacturing
  3. Business Trends driving innovation
  4. Technology Trends aiding the business

Key takeaways

The convergence of advanced technologies with labour, supply chain, and demand challenges is driving full automation. Nearly 84% of manufacturers have adopted or are considering smart manufacturing. Manufacturers are exploring tech-enabled ecosystem partnerships, reshoring, and factory-in-a-box model to address supply chain instability. AI, IIoT, Big Data & Analytics, Robotics, 5G & Edge Computing are enabling data collection, pattern identification, and prediction for process optimization and efficiency improvement. AI in manufacturing is expected to reach $115 billion in 2032 globally. Blockchain is ensuring supply chain and ecosystem security. Driven by regulations and environmental commitments, manufacturers are adopting technologies to reduce emissions. On-demand production, mass customization, and subscription-based products are enhancing customer experience. Download Complete Research

Key drivers shaping trends in banking

  • Ensuring supply chain resilience and navigating market demand uncertainty are manufacturers’ main requirements amid natural disasters and geopolitical tensions. AI and Data Analytics are key to overcoming disruptions and predicting demand.
  • Manufacturers are prioritizing automation to deal with skilled labour shortage, manage rising costs and enhance efficiency while maintaining quality.
  • Sustainability is another priority for manufacturers, focusing on responsible materials sourcing, environment-friendly production, and safe waste disposal. Customer preference is changing, and they are seeking sustainable products and processes.

Business trends driving innovation

  • Dark factories fully orchestrate processes using automated machines while operators remotely monitor activities, enhancing performance and resource efficiency.
  • The product-as-a-service business model opens new revenue streams for manufacturers while lowering the upfront costs for customers.
  • Global data exchanges & platforms allow data sharing between ecosystem partners while protecting proprietary data.
  • Green manufacturing is getting propelled using digital technologies and adopting sustainability policies.
  • Reshoring and micro-factories have gathered pace due to wage increases, supply chain disruptions, and the advent of digital technologies.
  • Prescriptive maintenance identifies patterns, performs root-cause analysis, and recommends the best maintenance approach, lowering running costs and downtime.
  • Customized product manufacturing is being enabled by additive manufacturing and flexible manufacturing approaches.
  • Advanced environment-friendly materials are gaining traction resulting in enhanced performance, high wear resistance, and high thermal stability of products.
  • These trends impact various stakeholders, including manufacturers, suppliers, workers, and customers.

Technology trends aiding the business

  • AI is transforming manufacturing through real-time machine operation optimization, problem prediction, demand forecasting, cost modelling, product quality inspection, robot navigation, etc.
  • IIoT is key for prescriptive maintenance, real-time production and machine monitoring. 5G provides high bandwidth for reliable connectivity between IIoT devices, offloading computation-heavy tasks to edge infrastructure.
  • Robots & Cobots enable production line process handling, intelligent material handling, and warehouse automation.
  • Digital Twin enables the convergence of information technology (IT), operational technology (OT), & engineering technology (ET) in manufacturing.
  • Blockchain allows for tracking materials & goods through the supply chain, inventory management, & warranty management.
  • Secure and dedicated private networks, Blockchain, and AI are increasingly used to safeguard critical manufacturing operations from cyberattacks.

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Credits
Lead Authors@lab45: Parag Arora
Contributing Authors@lab45: Hussain S Nayak

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