Artificial Intelligence – here for good

What comes to mind when you hear Artificial Intelligence? Perhaps one of those slick videos of robots making an omelette or an android (a humanoid robot – as it used to mean before the operating system came about). In reality, Artificial Intelligence (AI) has crept into a lot of things we don’t typically see – from contextual advertisements on the web, to customer support systems.

As banking goes digital, AI has begun to play an interesting role in the evolution of the digital bank. From intelligent automation systems that simplify payments reconciliation, general ledger management and OCR enabled document validation to First-Responder roles in customer support, AI has taken bold steps forward. Another extremely important trend in banking – one where market segments are of one customer has relied on AI to delivery hyper-personalized experiences based on customer profile, buying behavior and choice of products and services. In a day and age where customers demand simplicity, speed, and superlative experiences, Artificial Intelligence has come of age, so to speak.

This said, AI gets a resounding aye, when it comes to thrust areas for banks today, and come 2020. As AI maturity increases, banks have discovered newer and significantly more efficient means to reduce costs, improve regulatory compliance, and most importantly, consistently improve customer confidence in the bank’s ability to serve their needs, secure their information, and simplify their transactions with banks.

With use cases showing tremendous promise already, the trend for 2020 and beyond will pivot around AI, machine learning and deep learning platforms. These new entrants are poised to take customer experience management, Identity verification, fraud prevention and security by storm.

How will banks develop on the existing use cases and innovate their digital offerings with AI at the core? Learn about this and all the trends for banks to scale digital from our report.

This piece gives you a glimpse into one of the 10 trends that I believe will reshape banking in 2020. Click here to read our full report “Scale Digital: 10 Trends Reshaping Banking in 2020”.

Security 2020 – Fixing the link that risks breaking the chain

In 2015, two hackers, albeit in a controlled environment, hacked into a Jeep Cherokee through the entertainment system and disabled the transmission. This led to a recall of over 1.4 million vehicles to fix the vulnerabilities that made this attack possible.

Today, many such devices, connected directly to the internet are used to pay tolls and also send confidential and personally identifiable information through this internet to points of sale devices in drive through restaurants. The connected car isn’t the only connected device. Watches, Refrigerators, TVs, Home Automation systems – all connect to the internet and make transactions on behalf of the person. And they all transmit infinitely sensitive information.

The whole digital revolution has had everyone progressively move their data and applications to the cloud. And this opens an entirely different can of worms from a security standpoint. While public cloud providers have improved infra security, banks have to configure their applications safely on the cloud. They will need to build resilience through employee education, mature cloud competence and acquire new tools for managing cloud security.

And it doesn’t stop there. We have bragged about using big data, machine learning (ML) and artificial intelligence (AI ) to detect and prevent attacks – hackers are now using ML and AI to refine their attacks to an unprecedented degree of sophistication.

The biggest challenge for Cybersecurity experts is the fact that there is no longer a “Safe Zone” – no longer routers, switches, or firewalls to enclose sensitive information from the prying hands of hackers. 5G, and the Internet of Things (IOT) have brought an end to what we imagined as privacy.

Understandably, across the world, nations are enacting stricter laws and regulatory requirements to define and protect the privacy of citizens. At the same time, these very lawmakers are also forcing banks to share customer and transaction data with third parties in the name of anti-protectionism and free markets.

What will be the security of the future? How will banks of tomorrow protect customer information and yet collaborate with the global ecosystem of authorized stakeholders? This is the challenge for 2020.

As the digital age evolves, so will cybersecurity devices. Artificial Intelligence, machine learning and cognitive automation will form the basis for analyzing, understanding, identifying, and preventing cyber-attacks. Read in the Infosys Finacle report on top 10 trends for banks to scale digital in 2020 to explores the different strategies that banks are adopting to build a flexible, yet robust, fluid, yet firm security system that both protects data and prevents its breach.

This piece gives you a glimpse into one of the 10 trends that I believe will reshape banking in 2020. Click here to read our full report “Scale Digital: 10 Trends Reshaping Banking in 2020”.

Banks on the Public Cloud – The final frontier breached!

While historically, banks have been guilty of slacking when it comes to technological evolution, digital disruption has woken them to a harsh reality. If banks don’t get to where their customers are, new-age competition and those leading the way will do so, and in the process mop the marketplace with the erstwhile giants.

It is this race for survival that has had banks turn their heads to cloud, especially public cloud as a means to the end. But what end? Even in the recent past, most banks were content with moving non-critical and non-core workloads to the cloud. How did the resistance to cloud diminish?

A lot of what has changed in the past year or two can be attributed not just to the competition in the banking space, but also the fact that Cloud has itself evolved:

Here’s how we expect the banking-on-cloud trend to play out in 2020 and beyond:

All said and done, single tenant cloud systems are still the safest haven for confidential information. So how will banks reconcile with new environmental realities? How safe is the bet that Public Cloud IaaS and PaaS will grow multi-fold in the next two years? The biggest question is – will it really happen? Read about all this, and more in the Finacle Banking Trends to Scale Digital in 2020 Report to learn more about how Public Cloud will shape the future of banking.

This piece gives you a glimpse into one of the 10 trends that I believe will reshape banking in 2020. Click here to read our full report “Scale Digital: 10 Trends Reshaping Banking in 2020”.

Blockchain – Returning home of the prodigal

A while ago, there was this insurance advertisement. The father hears the baby say daddy for the first time, then comes mumma, even banana – the dad’s expectations rise, and he goads the baby to say Czechoslovakia.

The story of blockchain isn’t vastly different. After the initial hype, where some marketers saw, as John Oliver put it, their soft drink company stock prices rise because they put blockchain in their name. The higher it rose, the harder it fell and suddenly it was disillusionment everywhere. Luckily folks didn’t give up. Like in the ad which ends with the dad reassuring himself that the baby said banana – and that’s no mean feat!

The distributed ledger gained momentum with the two-fold experiment to demonstrate proofs of concept and value. With the launch of platforms such as R3 Corda, and Hyperledger Fabric, the arrival of 2020 marks the return of the prodigal blockchain. Faith and fanfare is back in the distributed ledger. Regulators aren’t far behind – promoting areas such as eKYC to have their basis in blockchain, there’s a bandwagon again – including Infosys’ own blockchain-based trade finance network.

The value of blockchain is finally real. And was demonstrated inescapably when its secure environment for digitization, automation, and approval in workflows. With a blockchain-based working capital finance system, banks are disbursing funds against invoices, albeit limited to certain types and value, in less than a day. This turnaround time used to be as long as 20. To mimic the dad in the insurance ad, 95% reduction in disbursal time isn’t a mean feat!

With the disillusionment in blockchain being unable to deliver on promises firmly in the past, there is a renewed focus and fervor in blockchain solutions. What will the future hold? How far will blockchain take us, as digital takes the world by storm? Read more in the Finacle’s report on top 10 banking trend to scale digital in 2020 as we look into the different strategies businesses are adopting in their blockchain initiatives, newer revenue streams, and diverse applications.

This piece gives you a glimpse into one of the 10 trends that I believe will reshape banking in 2020. Click here to read our full report “Scale Digital: 10 Trends Reshaping Banking in 2020”.

Internet of things – More there are, more we bank on them

As the number of connected devices slowly creeps past unnoticed catching up with the number of humans on the planet, we are beginning to rely on them increasingly.

The possibilities as much a cliché as it would be – are endless:

But how will IoT impact the way banking is done in 2020 and beyond?

Earlier, before the digital explosion, there were definitive guides to decision-making. Rotten tomatoes, yelp, word of mouth, financial advisors, fashion experts – there was a place to go or a person to approach, who would give us the basis for making our decisions. Today, analysis and reporting are no longer the realm of the experts. From restaurant menus to mutual fund performance, everything is analyzed thread-bare by a multitude of experts, each offering a unique, or a deeper perspective. This information, when personalized and contextualized can serve as a powerful influencer. This is where banks would like to be. And IoT will help them get there.

But there are also the questions of privacy, protection, and prevention of misuse. With so many devices connected, people often lose track of which information, which card, which bank account, or which line of credit is available to whom. Banks of the future will use IoT data such as geotags and multi-factor authentication using the different intelligent devices of the user to validate, authenticate, and process transactions smoothly. Likewise, we would need a robust governance layer regulating and monitoring the manner in which the Internet of Things deal with the little things in your wallet and your life. Furthermore, the data generated by these devices will also need adequate protection to prevent fraud and misuse.

Unlike market studies, which take weeks to present their findings, IoT offers real-time insight. This means banks can continually evolve and personalize their products instead of maintaining a static portfolio. As financial ecosystems connect among themselves and with other ecosystems on the IoT, banks can facilitate customer journeys around products from end to end and thus intensify engagement. An example comes from a challenger bank in the United Kingdom. The bank’s mortgage smart app also offers property insights to customers on their connected device. In addition, when a customer applies for a loan, the details are automatically forwarded to other agencies in the ecosystem, such as the local council and legal advisors, activating a logical chain of events. In 2020, expect a growing number of banks to use insights about device usage patterns to not only develop contextual portfolios but also build loyalty with effective loyalty programs for their products and services.

We will also see a sound governance framework evolving around IoT in 2020 and beyond.

What will be the landscape of IoT in the future? How will banks, marketers, service providers, enablers, aggregators, and users interact with this intricate web of devices and connectivity? If these questions are on your mind, do read our report on top 10 banking trends to scale digital in 2020.

This piece gives you a glimpse into one of the 10 trends that I believe will reshape banking in 2020. Click here to read our full report “Scale Digital: 10 Trends Reshaping Banking in 2020”.

2020: It’s time to scale

A Citibank analysis makes an interesting observation that while digitization could lower incumbent banks’ costs by 30 to 50 percent, largely by reducing headcount, it could also take away 10-30 percent of their revenues and give it to their even more digitized (new) competitors. This statement is referring to a scenario when the banking vertical layer will unbundle to digital disruption, laying open any inefficiencies for new age service providers to exploit. It conveys the extent to which digital is disrupting, pervading and transforming business; an extent that many organizations are yet to come to terms with. In banking, for example, digital has eroded the (incumbents’) advantages of reach and capital and completely commoditized products and services. With price, incentive and advisory also losing their potency as differentiators, banks are in search of that elusive unique proposition that will be valued by customers. Meanwhile, the agents of digital disruption new digital players (big tech, Fintech etc.) powered by modern technologies – Cloud, Artificial Intelligence, Blockchain, Mixed Reality, and Internet of Things – are steadily disintermediating incumbents from those very customers.

The way out of this grim situation – and it’s not an easy one – is to scale digital transformation throughout the enterprise. Most banks understand this but are unable to carry it through: in the latest Efma – Infosys Finacle ‘Innovation in Retail Banking’ survey, only 17 percent of respondents confirmed deploying digital transformation at scale.

Our conversations with banks around the world reveal a growing impatience to get past the challenges of legacy technologies, integration and culture, which are the biggest barriers to transformation at scale. Actually, incumbent banks have no time to lose, because each day is bringing a new competitor that is digital-native by design. Hence in 2020, we hope they will focus on five actions to achieve digital transformation at scale:

In 2020, Infosys hopes to help banks scale digital transformation throughout the organization. Our trends forecast also covers the shifts impacting this agenda.

Click here to read more.