New industry research finds AI, robotics and automation will be central to the future of financial services
A majority (55%) of banking and wealth management professionals view Artificial Intelligence (AI), robotics and automation as the most significant developments that will shape the future of the global financial services industry. According to new industry research by Swiss fintech Avaloq, additional key developments include the increasing use of more open and collaborative platforms (cited by 34%), and the rise of distributed ledger technologies and cryptocurrencies (26%).
The Avaloq study, which gauged sentiment towards the ongoing digital transformation of the industry, found that the top three current areas that digital infrastructures are delivering significant improvements in performance were: ensuring compliance under changing regulations (48%); improved customer experiences (46%); and better cyber security (42%). Looking forward, a superior ‘customer experience’ was singled out as by far the most important competitive advantage for institutions to have in five years’ time: 41% of respondents cited it as their preferred competitive advantage, more than double the next placed factor, ‘operational efficiency’ (19%).
In terms of how financial institutions will capitalise on key industry trends such as Artificial Intelligence, automation and the focus on delivering a strong customer experience, just over two fifths of respondents (42%) said that ‘one core platform combined with single add-on applications’ will be the most popular and effective software strategy. This is twice as many compared to those who said either ‘several single best-of-breed platforms’ or ‘one integrated front-to-back platform’.
Martin Greweldinger, Group Chief Product Officer, Avaloq: “The digital transformation of the financial services industry has already begun, with many institutions embracing the significant benefits that digital and cloud-based operating models such as BPaaS and SaaS deliver. But it is clear that even bigger changes are arriving, particularly with regards to AI, robotics and automation, which combined with design thinking methodology will enhance the overall customer experience. Avaloq believes this will profoundly change and improve the way financial services are delivered across all customer segments.
“As our research confirms, in this environment and to remain competitive, institutions will continue to move to scaleable, highly efficient and adaptable digital platforms that ‘future proof’ business models in a fast-changing, digitising market. These platforms will allow banks and wealth managers to grow and partner seamlessly with a host of third parties and fintechs.”