What Sibos 2017 Taught Us About Banking Trends for 2018 and Onward
This year’s Sibos was one of the most exciting conferences of the year. The fast paced week in Toronto delivered thought-provoking strategic ideas around disruptive innovation, digital technology, and new business models. And, we touched on all the hot areas—Blockchain, Internet of Things (IoT), Artificial Intelligence (AI), FinTech, and the latest regulations such as the second Payment Services Directive (PSD2). However, the hottest topic was data—and how it holds the power to deliver value for the industry.
Data Will Fuel New Business Opportunity
Global banks carry significant chunks of data—mostly transactional and some behavioral—resting in legacy systems and distinct silos, representing the lifeblood of all the business units. All of this data can translate into tremendous opportunities, but only when it is made available to key stakeholders and harvested for decision making.
Those seasoned in the industry would agree that success depends on how fast and effectively banks can harness data to drive seamless service delivery. That is why digital transformation technologies are focusing on how the back end, front end and all the disparate units in between can be seamlessly connected to deliver insights and enable critical processes.
Artificial Intelligence (AI) Will Improve Critical Processes
AI-powered applications are poised to explode in the financial services industry. The research indicates cognitive computing—the fastest growing category of AI— is fast finding its way into applications that Financial Services Institutions (FSIs) are using right now to improve business processes, and provide a better, faster, more personalized retail and corporate banking experience.
Royal Bank of Scotland (RBS) has turned to AI-powered bots to provide better, faster customer service
Capital One Financial has also introduced a “chatbot” to provide account information via text, and help customers make credit-card payments from their smartphone
Bank of America customers can interact with a bot on Facebook’s Messenger platform. And the list goes on
In the age of digital transformation, speed is essential to transformative change—the speed of adapting to change driven by Fintech disruption, change driven by rising customer expectations, and change fueled by an ever-changing regulatory environment.
Large banks process boatloads of data for the routine processes behind financial reports and regulatory compliance. These routinized, rules-based, repetitive processes are ideal candidates for Robotic Process Automation (RPA). Concurrently, banks can save an estimated 30% of compliance costs by embedding AI in compliance applications. Beyond compliance, AI has the potential to drive top-line growth, boost customer engagement and increase lifetime customer value.
Digital Platforms are the Next Chapter
A decade has passed since the financial crisis, and at Sibos we considered how the global banking industry is writing a new chapter—adapting, innovating, and coping with technological and geopolitical changes. But the industry’s return on equity (ROE) is lingering around 9% and profits remain elusive amidst sluggish revenue growth.
To further thrive and deliver double-digit ROE consistently, banks must improve speed to market and increase efficiencies, by reducing costs and implementing customer-centric tactics—and that’s where technology can deliver unprecedented business outcomes. With an application platform serving as a unified abstraction layer, banks can not only move the needle on their efficiency score, but also create transformative change, turning resources into revenue at light speed.
Get Started, Today
I truly enjoyed the time spent in engaged discussions with so many peers at Sibos, and appreciated the time the audience took to attend my Theater Session with our customer KKR.
The one priority that was raised in all the conversations: don’t wait to get started.
It’s a fact of life, we miss 100% of the shots we never take, so don’t wait to get started. Drop me an e-mail at: Michael.Heffner@appian.com, and let’s find time to discuss strategies to help you achieve business impact for your financial enterprise.
Let’s talk soon.
See the video to see why Data, AI and Efficiency are key to digital transformation; find out:
- Why speed is the key to transformative change
- What factors will determine bank competitive positioning
- How to leverage AI for data hidden across legacy systems