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Notes on Technology for BFSI in 2024

As we approach the conclusion of the current year (2023), with a tailwind of progress propelling us into 2024, it is noteworthy that the technological landscape has remained a focal point of significant developments in the world. In particular, we have witnessed a remarkable transformation within the banking and financial services sector as it has undertaken comprehensive digitization initiatives.


At the heart of this transformative journey lies the impetus generated by the burgeoning field of Artificial Intelligence (AI), coupled with substantial investments directed towards modernizing and revolutionizing the technological foundations that underpin businesses.


The trajectory of 2023 can be discerned in two distinct phases. The earlier part of the year bore the imprints of innovations and strategies that had been set in motion during the preceding year, while the latter half has been characterized by a heightened pace, accompanied by promises of how AI and hyper-automation will reshape the paradigms of productivity, efficiency, and effectiveness.


As previously elucidated, when technology attains the status of a General Purpose Technology (GPT), it finds broader application within the ecosystem, backed by substantial investments to translate theoretical use cases into practical business realities.


According to the latest data, the global landscape boasts an impressive tally of 57,933 artificial intelligence companies. The United States is home to a significant share of these entities, with approximately 14,700 AI companies representing just over 25% of the global total. This remarkable surge signifies a doubling in US-based AI companies since 2017 (Sources: Tracxn, Tracxn, eWeek).


Furthermore, it is striking to observe the global adoption of AI, with China and India leading the charge with deployment rates of 58% and 57%, respectively, significantly surpassing the global average of 34%. This robust adoption trend exhibits a year-on-year increase, underscoring the continued ascendancy of AI on the corporate agenda.


The latter half of 2023 witnessed a crescendo in the discourse surrounding AI and related technologies. The corporate skirmish at OpenAI in November 2023 is a poignant reminder that virtually every major tech corporation in the world aspires to claim a substantial stake in the AI arena. While the transformative impact of AI on various aspects of our lives was never in doubt, the emergent concern revolves around the potential risks and challenges accompanying its explosive growth.


As we set our sights on 2024, it is evident that substantial financial investments are poised to flow into AI and its allied technologies, such as Machine Learning and Big Data.



These encompass generative AI, digital transformations, navigating the evolving talent landscape, achieving sustainable growth and resilience, driving the transition to a net-zero economy, and fostering diversity, equity, and inclusion within organizations.


Notably, AI has firmly entrenched itself in the collective consciousness of CEOs, and this trend is expected to persist over the coming years. While the leadership mentioned above traits encompass a broader spectrum of managerial considerations, the pivotal technology shift expected to catalyze numerous other technological conversations and investments is the ascent of AI.


In the context of the Banking, Financial Services, and Insurance (BFSI) sector, several compelling business cases are anticipated to gain traction in 2024:


  1. Predicting and enhancing client credit profiles using AI.

  2. Leveraging conversational chatbots for seamless client onboarding.

  3. Automating processes through AI to achieve operational efficiencies and excellence.

  4. Employing machine learning to discern client transaction patterns for enhanced data provisioning.

  5. Utilizing AI for budgeting and forecasting purposes.


Moreover, another prominent theme set to gain momentum in 2024 is Digital Transformation, as organizations increasingly recognize the imperative of embracing this paradigm shift.




 

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