Playbooks of traditional companies are being disrupted at a rapid pace. With new technology coming in at regular intervals, the future that lies ahead looks exciting and challenging at the same time.
In such an ever-changing world dominated by innovation, here are six technology shifts that business leaders should be prepared for:
ARTIFICIAL INTELLIGENCE
ROBOTICS & AUTOMATION
DIGITAL ASSISTANTS
VIRTUAL & AUGMENTED REALITY
BLOCKCHAIN
INTERNET OF THINGS
The choice is with companies whether they want to do the transformation of current processes into newer technologies, as a program, or have strategies built into each business to embrace each of these shifts.
Artificial intelligence (AI)
AI (artificial intelligence) refers to a computer program’s ability to generate intelligence. AI programs capture historical data about their environment and learn from that data to take decisions. Because AI can take a decision, dependency on humans gets lowered.
From automating fraud detection, to deciding who to lend to, AI has very powerful cases which financial institutions can benefit from.
However, for the benefits to kick in, BFSI business leaders need to have a clear strategy regarding how data can be captured, stored and utilized, serving as a basis for improved decisions, better insights and optimisation of business processes.
Robotics process automation (RPA)
Automation of physical work duties is a rising trend across sectors, which has slowly and steadily trickled into BFSI as well.
Applying RPAs frees up human resources, improves quality and increases uptime in processes.
From automated trade settlements to programmatic payouts, RPAs are ensuring that employees can focus on higher-value work, instead of repetitive manual work. But RPAs are not restricted to repetitive jobs alone. Use cases like Robo-advisory are also able to do jobs which require a baseline intellect like coming up with an investment strategy for clients and then executing the plan.
Virtual assistants
Virtual assistants are various types of software that are capable of performing rule-based work processes and communicating with customers through writing and speech. Virtual assistants are represented by technologies such as chatbots and voice assistants. These assistants are new digital colleagues that will help the financial institutions of the future meet the demands for productivity and accessibility, as well as support the shift from “doing jobs” to activities that add value for analogue employees.
Virtual assistants are a good solution for businesses that want to increase service accessibility and service quality for customers, as well as improve response times for their customers or employees.
A digital workforce will be able to take over and automate a large part of today’s manual business processes. A high proportion of processes associated with functions such as business finance, MIS reporting, customer servicing and human resources are currently handled by employees who have to compensate for incomplete IT systems. This means that a lot of valuable time that could have been devoted to solving more complicated problems is spent carrying out work tasks that could have simply been performed by virtual assistants.
Virtual & augmented reality
Virtual reality (VR) is a technology that allows the user to interact in a computer-simulated recreation of a real environment. Augmented reality (AR) is a fusion of VR where reality and a computer-simulated environment are merged, which we have seen with games such as Pokemon Go.
In BFSI, VR and AR will be used similarly - customers will be able to experience being in a branch and interacting with bank employees, without physically travelling to the branch. We are already seeing the early signs of JP Morgan opening a lounge in Decentral and, a popular metaverse.
Not only will customers be able to enter a virtual branch, but one employee will be able to serve multiple customers 1-on-1 simultaneously at the same moment, using avatars.
Blockchain
A blockchain is a new form of distributed transactional database, in which all the parties are always in possession of the same information about the transactions. It is not possible to tweak or change information in the database unless the majority of participants agree (proof of work and proof of stake) that the change complies with the rules defined for a transaction to be approved and added to the database.
A blockchain, therefore, makes it possible to carry out transactions securely between multiple parties using smart contracts, without the need for the transaction to be verified by a third party (such as a bank).
Today, blockchain is mostly associated with cryptocurrency, but the applications and opportunities are enormous within sectors such as banking, cross-border trade settlements, cross-border lending and insurance.
Internet of things
The Internet of Things (IoT) comprises objects that are identifiable using sensors which can communicate with each other and exchange data via the Internet and cloud solutions.
While the applications for IoT are limitless, there are some use cases for BFSI which are exciting. NFC and wearables-based payments are a big use case, which has just started to grow. From Amazon Go to Apple Pay, Samsung Pay and Google Pay, we are already seeing IoT-based payments pick up speed.
The second example of a game-changing application of IoT in BFSI is insurance. From telematics in the car to using sensors in mobile devices and wearables to keep track of a customer’s health vitals - how car insurance, term insurance and health insurance are priced and settled will slowly start depending on IoT-led decision-making.
We have highlighted six technologies that we consider will be exciting moving forward, which we believe will have the capacity to change how financial companies will touch our everyday lives. These will likely be the right ones for your business to explore.
With our expertise in driving large-scale digital transformation projects in BFSI and incubating early-stage innovations, we can be the right partner for you to guide you through this exploration. Reach out to us today at info@executepartners.com.
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