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Technology Trends in Banking: 4 Areas Leaders Need to Watch in 2024

Victoria Ebel, Appian
September 21, 2023

The financial industry has undergone significant transformation due to technological advancements, reshaping the way banks operate and interact with customers. Financial institutions must stay abreast of these changes and proactively embrace technology to remain competitive and provide the best possible services to customers.

Here are the four banking technologies leaders should pay attention to right now.

1. Artificial intelligence.

Artificial intelligence (AI) is transforming banking, from customer service to risk management. Here are several key areas where AI is adding value to the banking sector:

Personalized customer service. AI-powered chatbots are enhancing customer support by providing instant assistance 24/7. Banks are also leveraging AI for data analytics to gain insight into customer behavior, allowing them to tailor their services and marketing efforts more effectively. 

Anti-money laundering (AML) and Know Your Customer (KYC) compliance. AI algorithms help analyze AML alerts faster than human compliance teams. Automation can also improve visibility in your decision-making process, helping you make informed decisions faster.

Risk management. AI helps banks assess and manage various risks, including market risk, credit risk, and operational risk, by analyzing historical data and predicting future scenarios. This allows for better risk mitigation strategy and execution.

Financial institutions should keep a close eye on the evolution of AI. By harnessing the power of data and automation, banks can optimize their processes, reduce operational costs, and provide a more tailored experience for customers.

[Want to learn more about how AI is helping with risk mitigation? View the webinar.]

2. Blockchain.

In banking, blockchain serves as a transparent, secure, and efficient system for recording and verifying transactions. Blockchain can enhance security, reduce fraud, and streamline processes such as: 

Cross-border transactions. Blockchain can streamline cross-border transactions, making them faster and more cost-effective. Banks should explore partnerships and solutions that leverage blockchain for international payments.

Regulatory compliance. Blockchain can assist banks in complying with regulatory requirements by providing an immutable audit trail, simplifying reporting, and ensuring data accuracy.

Customer experience. Blockchain technology can enhance the overall customer experience by enabling faster and more secure transactions, reducing the time and effort required for account opening and loan processing, and offering real-time visibility into transaction history.

Banking leaders need to closely monitor developments in blockchain and explore how it can be integrated into their operations to provide more efficient and secure services to customers.

3. Cybersecurity.

As technology continues to advance, so do regulatory and data privacy requirements. Banking leaders must be vigilant in ensuring that their institutions comply with evolving regulations, such as GDPR in Europe and various data protection laws around the world. Failure to do so can result in significant fines and reputational damage.

Additionally, data privacy and security are paramount concerns for customers. Banks must invest in robust cybersecurity measures to protect sensitive customer data from cyber threats and breaches. Leaders must prioritize cybersecurity measures to protect sensitive customer information and maintain trust, including:

Advanced authentication. Implement multi-factor authentication and biometric authentication methods like fingerprint and facial recognition to enhance security for online and mobile banking.

Threat detection and response. Invest in AI-driven threat detection systems that can identify and respond to potential security threats in real-time.

Data encryption. Ensure that sensitive customer data is encrypted both in transit and at rest to prevent unauthorized access.

Demonstrating a commitment to data privacy and security helps build trust with customers in an era where data breaches are increasingly common.

4. Process automation.

Process automation should be a cornerstone of any effort to modernize and future-proof a banking organization, ensuring it remains agile, responsive, and customer-centric in the ever-evolving financial sector. By automating repetitive, time-consuming tasks and workflows, banks can see:

Enhanced efficiency. End-to-end process automation streamlines complex banking processes, reducing manual intervention and the need for human oversight. This leads to faster task execution and improved operational efficiency.

Cost reduction. By automating the entire process, banks can significantly reduce labor costs, eliminate the need for redundant tasks, and minimize the risk of human errors for  cost savings.

Scalability. Automated processes can easily adapt to changes in workload or demand, allowing banks to scale their operations efficiently without significant manual intervention.

Adapting for a tech-driven future

The financial sector is undergoing a rapid transformation driven by technology, and banking leaders need to be at the forefront of these changes. Discover how Appian is driving digital transformation for financial institutions with AI-powered process automation. View the webinar.