The Bank Of The Future: Emerging Technology Trends

The Bank Of The Future: Emerging Technology Trends

It is no secret that banking is undergoing significant transformations, driven by financial technology disruptors and the emerging technological trends.

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It is no secret that banking is undergoing significant transformations, driven by financial technology disruptors and the emerging technological trends.

However, traditional banks still struggle to understand the changing technology landscape. Naturally, industry leaders seek to gain valuable insights into how to reinvent their organizations. So, how is the banks` transformation really happening? Which are the top technology trends? EY, a multinational professional services company, issued a report that tries to give some answers.

The future is here

The banking sector is currently seeing a rapid and wide scale transformation. The challenge for banks is to understand the technologies that are reshaping and will continue to reshape their business model. Traditional banks need to prepare for the future by learning how to differentiate.

The newly emerged opportunities and threats prompted banks to spend a high proportion of their IT budgets on new investment. As the research explained, total bank IT spending across North America, Europe and Asia-Pacific was estimated to grow to $196,7 billion in 2015, an increase of 4,6% over 2014. Also, it should be noted that the growth is largely driven by the Asian-Pacific region.

Overall, banks are pursuing competitive advantage through three paradigms, as listed in the report:

  • Enhancing and extending enterprise efficiency through technological transformation
  • Improving customer propositions for greater revenue
  • Changing culture by providing resources to increase collaboration and innovation

As explained by Meredith Angwin, Partner, IT Advisory, Oceania Financial Services, making investments in innovative technologies that are not fully proven yet is becoming a differentiator for banking service providers. But which are these technologies? How to tell which technologies are mature and which of them are to be adopted shortly?

Technology trends

EY has analyzed the potential of a range of technologies and divided them into three groups: 1) technologies of today, 2) near horizon technologies, and 3) distant horizon technologies. Here is a quick overview of these technologies:

  1. Today
  • Cloud computing
  • Big data
  • Cybersecurity
  1. Near Horizon
  • Internet of Things (IoT)
  • Augmented reality (AR)
  • Context-aware computing
  1. Distant Horizon
  • Quantum computing
  • Advanced robotics

Looking closely at advanced robotics, for instance, it can be said that a new generation of emotially intelligent robots may replace branch staff at nation-wide telecommunication retailers in the future. Humanoid robots could also be used to provide in-branch services like muli-lingual capabilities and rapid approval processing that can improve customer experience and reduce cost, as the research claims.

The bank of the future

The changing ecosystem requires a different culture – a culture that is comfortable with disruption.

“To create an institution that embraces new technologies successfully, banks need to develop a culture that is comfortable with disruption and seeks positive change”, as the report reads.

Banks need to face the new challenges and equip their staff with the tools needed to adapt to the new environment. This will mean promoting an innovation culture that encourages employees to:

  1. Challenge
  2. Create
  3. Incubate
  4. Activate

Technological advancements are already here. It is to be seen whether banks will manage to use them in the best possible way. The very future of banking depends on it.

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