Five inevitable technology trends for the financial sector

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Felippe Mantteucci Melo, Vice President of Technology at IBM Brazil, explains, based on the IBM Institute for Business Value 2021 report, the relationship of customers with financial institutions and highlights trends in the digitalization of services in this sector .

It was almost in the blink of an eye: Suddenly, customers’ experience with the financial industry reached a level that few people imagined a few years ago, when they were still waiting impatiently in line at an ATM. .

The relationship between people and banking institutions continues to evolve exponentially and for this the level of investment in technology is massive. Naturally, after all, it is this contribution that will accelerate the digitization of services and create new ways of connecting banks and their customers.

Throughout 2020, the financial sector in Brazil confirmed this scenario: investments in technology increased by 8% here, to around 8.9 billion reais. More than that, disruptive technologies have gained significant prominence in IT investments, with AI being a priority for 93% of institutions, a 10% jump in just 12 months.

As a concrete example, more than 618 million calls were answered via chatbot in the past year in the country according to the FEBRABAN 2021 survey on banking technologies.

Associated with such consistent figures, the banking sector will experience a new phase of transformation with the consolidation of Open Banking, a standardization of the process of sharing data and financial services by institutions through the opening and integration of technological platforms and infrastructures.

Trusted digital relationships have therefore become the main asset of financial institutions. IBM recently released the IBM Institute for Business Value 2021 Global Outlook for Banking and Financial Markets Report on the trends that will dominate this market in several countries, including Brazil. I have listed a few for us to observe.

Personalized, transparent and real-time services

With the COVID-19 pandemic, customers have rapidly migrated to direct service channels such as mobile apps and online banking. The significant increase in the use of these digital experiences has fueled the demand for personalized, seamless, real-time and integrated services into customers’ lives and businesses. As a result, banks are accelerating the adoption of technologies such as artificial intelligence, automation, and hybrid cloud, accelerating this process.

New cloud-based enterprise architectures: an inevitable migration

Banking institutions are migrating to new operating models based on a hybrid and open multi-cloud architecture. To achieve the expected return on investment, financial institutions can target a range of 40-50% of workloads in a specific public cloud, around 20% in a traditional public cloud, and the remaining 30-40% on-premises, on the foundation of a modern mainframe infrastructure. Banks are accelerating this migration of critical workloads to the cloud.

Increase open and free data to generate leads

The banking industry has access to vast amounts of customer data that is increasingly open. Data environments need to be modernized, leveraging new analytics and artificial intelligence (AI) tools, while striking a seamless balance between ownership and sharing across entire ecosystems.

Redefined workforce

Teams of employees, contractors and automated systems work together on new collaboration models for well-defined tasks and areas of expertise – all accelerated by telecommuting. The redefinition of the workforce, combined with intense competition for digital talent, will transform the way resources are recruited and managed in the industry.

Competition beyond the financial market

Big companies, including big tech, are expanding their business with in-house finance departments. They connect with customers, enabling and leveraging the ecosystems around people’s lives and their businesses. Through this movement, the main financial institutions are also developing new value propositions that address this unprecedented model of financial services consumption. They innovate “from the inside out” to connect with and engage customers on non-bank platforms.

In the same way that people are immersed and, for the most part, adapted to the new technologies offered by the financial sector, institutions must also be prepared and well guided by leaders who are attuned to new trends. The technological revolution is inevitable at all levels of financial activity, but it remains to be understood which companies are best prepared for it. The line at the ATM has undoubtedly fallen behind.

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