Digital transformation looks different for every organisation, but looks set to continue accelerating into 2024 across financial services.
How will digital transformation accelerate further in 2024?
Digital transformation is poised for significant acceleration in 2024.
Driven by the widespread adoption of hyper-automation and the integration of AI, these advancements will further empower financial institutions to streamline their operations, boost efficiency and harness the power of data analytics.
This will provide more informed, precise and strategic insights and decision-making, ultimately propelling financial institutions to new heights of innovation and effectiveness in the coming year.
Gen AI has come on leaps and bounds in 2023. How much will it impact financial services next year?
AI has dominated 2023 having made significant strides across various industries. With numerous examples of best practices, its implementation has further increased confidence in the potential of AI-driven decision-making.
Naturally, this surge in adoption has also raised concerns regarding the overuse of the term and as AI continues to gain traction, clarity around the terminology is needed.
Looking ahead into 2024, there is likely to be a shift towards more precise language, using alternative terms such as robotics and machine learning that are more fitting to its capabilities. We are far from reaching the pinnacle of AI’s potential.
As these technologies continue to evolve and develop and more of their capabilities are uncovered, they will continue to shape the financial industry meaningfully, leading to enhanced efficiency and improved customer experiences.
Consumer expectation around customer experience is also likely to rise, given that consumers are increasingly reaping the benefits of convenience brought by AI in various aspects of their lives.
Can you foresee open banking becoming more entrenched in financial services?
Open banking is poised for substantial growth in the UK and worldwide. Recent data from Open Banking Limited show a significant increase in open banking payment transactions in July 2023, representing a 9.3% increase on the previous month and 102% growth compared to the same period the previous year.
This trend is mirrored globally with open banking gaining particular traction in Brazil where Pix, Brazil’s instant payment scheme, processed 8.1 billion transactions in the first quarter of 2023, nearly double that of credit and debit card transactions.
The entry of major consumer-focused players into open banking solutions indicates that mass adoption is on the horizon. However, this requires current barriers to entry to be addressed, most notably, regulatory hindrances that limit contracts between third-party providers.
With the arrival of PSD3, along with the consideration of PSR and FiDA, there is much optimism that many regulatory challenges will be mitigated. The time to get this right is now and many well-funded fintech companies are well-positioned to make substantial progress in this field.
Do you expect to see payment friction topping financial institutions' agendas in 2024?
To remain competitive in today’s digital world, financial institutions must ensure a seamless customer experience. With the advent of AI, consumer expectation around customer experience has risen.
Both modern consumers and merchants are increasingly seeking out convenience, flexibility and security in their payment methods and recent research anticipates the frictionless payment technology to grow to US$8tn by 2024.
In addition, with global social commerce sales expected to triple by 2025, financial institutions looking to maintain a competitive edge and hoping for a piece of the pie in this growing sector will look to prioritise facilitating a frictionless journey for their customers.
What other digital transformation trends are coming in 2024?
A significant shift in the type of products offered within the financial industry is expected in 2024 as consumers become increasingly environmentally conscious which will drive a greater demand for sustainable and environmentally responsible banking products.
Looking ahead into 2024, net-zero banking is likely to dominate the financial services landscape.
Another interesting trend expected in 2024 will be the expansion of fintech companies into Africa and Southern Europe which are emerging as promising markets for fintech growth.
The latest investment figures reveal significant growth opportunities within these regions. As the demand for innovative financial solutions increases, fintech companies are expected to bolster their offerings and increase their footprint within the region.
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