Overhauling financial technologies for increased income and productivity within economic systems
In the rapidly evolving financial landscape, financial institutions are grappling with the challenge of positioning themselves for the impending great wealth transfer. As aging account holders prepare to pass on their assets, a new generation of digital-savvy accountholders is emerging, seeking a seamless mobile and digital banking experience.
To meet these changing demands, banks and credit unions must adopt a smart strategy that leverages cutting-edge technology to enhance efficiency, boost revenue, and foster a strong connection with younger accountholders. Here are some key aspects that financial services organizations should consider:
Cloud Computing and Migration
Moving applications to the cloud, either through lift-and-shift or cloud-native refactoring, offers numerous benefits. This transition improves performance, scalability, and operational cost management. Refactoring enables better integration with AI and analytics tools, increasing agility and innovation capacity.
Real-Time Technologies
Implementing real-time solutions like instant credit scoring and payment processing meets the customer demand for speed and responsiveness, enhancing customer satisfaction and competitive advantage.
Artificial Intelligence (AI) and Machine Learning (ML)
Leveraging AI/ML for personalized financial services, risk assessment, fraud detection, automated credit underwriting, and customer support reduces manual workloads, improves accuracy, and drives revenue through tailored offerings and reduced losses from fraud.
Robotic Process Automation (RPA)
Automating repetitive, rule-based back-office processes such as loan processing, account reconciliation, and compliance reporting boosts efficiency, accelerates turnaround times, reduces human error, and ensures consistent regulatory compliance.
Open Banking APIs
Using APIs to enable data sharing with fintechs and third-party providers fosters innovative services, real-time financial insights, and personalized products, thus expanding customer engagement and new revenue streams.
Cloud Cost Optimization and FinOps Best Practices
Continuous monitoring and management of cloud resources via automated workload scheduling, rightsizing instances, eliminating idle resources, and reserved capacity planning reduce operational costs without sacrificing performance or uptime.
Enhanced Security and Compliance
Deploying enterprise-grade security features within cloud systems, including encryption and multi-factor authentication, is critical for protecting sensitive customer data and meeting regulatory requirements, thereby maintaining trust and avoiding costly breaches.
Data Analytics and Intelligent Systems
Integration of advanced analytics and intelligent financial management systems improves decision accuracy, operational efficiency, transparency, and accountability, contributing to cost reduction and revenue growth.
Next-generation Core Banking Platforms
Next-generation core banking platforms consist of modular components for functions like payments, lending, and wire activities. The modular design reduces risk by enabling incremental testing and iteration, and allows for the rollback of individual modules if issues arise.
However, it's important to note that human capital is a major technology gap for banks, requiring expertise in technology management, change management, and co-innovation in complex ecosystems. The great wealth transfer is reshaping inter-generational banking, with banks and credit unions needing to understand their next generation of accountholders and the wealth management options they require.
By combining these technologies and approaches, financial services organizations can streamline workflows, cut costs, accelerate service delivery, engage customers more effectively, and ultimately increase revenue.
- To attract and retain the new generation of digital-savvy account holders, financial institutions should consider leveraging cloud computing and migration for better integration with AI and analytics tools, thereby providing personalized financial services.
- In the face of the great wealth transfer, financial services organizations can enhance customer satisfaction and competitive advantage by implementing real-time technologies, such as instant credit scoring and payment processing.
- To foster strong connections with younger accountholders and drive revenue growth, banks and credit unions must consider adopting next-generation core banking platforms that offer modular components for functions like payments, lending, and wire activities.
