The Banking Technology Vision identifies the need for leveraging emerging and future technologies that disrupt the industry. COVID-19 brought in the biggest reinvention of banking with leaders focusing on quickly bring in the decade-long agendas of transformation to practice as soon as possible. The significant shifts in the economic volatility, business environment and expectations of customers and staff has made it necessary to adoptnew technology and prioritize technology investments.
The inclusion of financial technology has changed the world and brought in revolutionary changes in banking. Banks are focussing on accelerating their digital transformations, reimagining their people, data, architectures and ecosystems and pushing ahead with business plans and innovative technology choices.
Let us look at some of the ways the banking sector is set to leverage future technologies. The Covid 19 pandemic has also played a major role in relooking at how technology will be used to meet the challenges of a post Covid business world and reinvent the future of banking.
Shifting to a composable architecture Banks are investing in a composable architecture to take transformation to the next level. Every separate unit of a bank like a deposit wing, lending business, payments unit,trade finance operations, etc, contribute and thrive on their own. The focus is to leverage their growingstrengthsto benefit each other greatly, by moving to a composable architecture. This can be achieved in portions, moving part by part, without disturbing the business of the bank. A composite architecture future-proofs the bank by helping it to respond to future challenges with agilityand making it highly scalable. The use of AI, Machine learning and pattern analysis can help to optimize thingsthrough self-learning and provision its own server, infrastructure and memory requirements automatically.
Shifting to public cloud The pandemic forced operations to go remote by limiting the entry of employees into data centres which drove businesses towards the cloud, which showed advantages like scalability, agility, cost-efficiency etc. In the future, bank will discard on-premise thinking and move to a cloud-first approach. They will first go to a private cloud, then a virtual private cloud under public cloud infrastructure, then to a hyper-cloud and finally, move to a poly-cloud environment. This environment also provides access to a huge community of developers for external innovation.
Exploring API-led possibilities As customers sought digital service providers during the pandemic, they alsoenjoyed an enhanced customer experience, engagement and innovation as against traditional banking. This made the banks realise that while building new applications,they needed API-first thinking to take care of external innovations and allow third-party developers to build innovations on top of their services. The future will have banks focussing on domain, business and function-oriented APIs.
Bringing in value with data &AI 2021 was predicted to be year that AI (which was a fixture in the last two or three year-end predictions), will be used to actually generate real business valueacross the office. AI will help to reduce fraud, increase efficiency and productivity, understand customer behaviour better and target products and promotions at the right customers. Banks are looking at scaling AI solutions to improve business, boost revenues and lower costs.
Moving towards distributed ledger technology Distributed Ledger Technology networks are highly secure, transparent and cost-effective and are well suited for cross-border payments, facilitating trade finance transactions including documentation, and issuing centralized digital currencies. Distributed ledger technology promises to deliver business value in the future with not just banks but also regulators and government bodies who use it for digitizing land records and personal identification data, or for capital market transactions.
Banks are moving into a futuristic world collaborating with new age technologies to facilitate a constantly growing need for speed and efficiency in every sector of finance and banking. To meet the expectations of this constantly changing world, banks are leveraging technology to the most besides putting the customer or client on the top of their priority list.
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