By Philip Freeborn, CEO Operate at Delta Capita

Accelerating technological developments are creating a slew of critical opportunities and challenges for financial firms. Here are the most important trends to watch in 2023.

Customer experience becomes more human and personalised

Digital experience has been critical to financial firms’ strategies for a decade. But since the pandemic, customers have become less forgiving of companies that don’t put them first in everything they do. For example, most people now say they would switch banks for a better experience.

Firms are also learning they cannot digitise at the expense of the human touch. According to research, banks that combine humanity and personalisation into their digital interactions can forge very strong customer connections, build trust, and drive growth. Being able to complete the transaction, with ease and in a timely manner when the customer determines it suits them is where Financial Institutions need to get to.

Various technologies, such as conversational intelligence, can support your efforts to become more human and personal again. They will help you provide a unique and innovative customer-centric approach, and a productive and appealing user experience at every engagement point.

Open banking drives inclusivity

Improvements in the way financial companies store, access and use data will play an increasing role in driving sustainability – for example, in helping track environmental, social and governance (ESG)-related risks across supply chains.

Another growing aspect of ESG is financial inclusivity. Developments such as open finance are driving inclusivity worldwide – for example, global account ownership grew from 51% to 76% between 2011 and 2021, according to the World Bank. But open finance is only just getting started, and many of its accessibility benefits are yet to be realised.

Inclusivity, however, is challenged in certain specific demographics too. For example, an increasing problem is that some parts of the population cannot get used to the heavy digitisation of the financial world since the global pandemic – and are increasingly left behind. These groups have different servicing needs and may prefer human assistance and one-on-one collaboration.

DC’s technology supports businesses to service the whole spectrum of their customers, and specifically assists customers who cannot fully cope with a technology-heavy approach.

Datafication leaders reinvent the value chain

Datafication means turning many aspects of our life into data, which then realises new forms of value. The financial industry has one of the highest levels of data intensity, and so is one of the most disrupted by the trend toward datafication.

Banks who lead on datafication will increasingly be able to improve customer and employee experience, operational effectiveness, strategy and compliance.

It will also allow them to develop new revenue opportunities; and improve transparency and decisions about upstream and downstream supply and distribution. Datafication will therefore enable technology leaders to reinvent parts of the financial services value chain. This trend is exacerbating a shortage of data scientists and quants in the industry. 

Artificial intelligence becomes a critical driver

Artificial intelligence is becoming a critical driver of growth and sustainability in financial services.

AI will increasingly enhance anti-financial crime efforts by, for example, analysing large numbers of transactions to highlight fraud and money laundering trends and detect them in real-time.

AI-powered chatbots can minimise the workload in call centres, and transform the customer experience. As mentioned, the rise of so-called conversational AI will enable more humanised customer experiences; rather than the limited communication chatbots have delivered so far.

Firms will also increase their use of AI to improve experience and efficiency in lending decisions, insurance, wealth management, regulatory compliance, and much more.

The cybersecurity battleground changes

Financial crime continues to increase in volume and sophistication. Two out of three businesses feel their cybersecurity risks are growing – with financial firms among the biggest targets.

In the first half of 2021, criminals stole £753 million through fraud alone, according to UK Finance – an annual increase of 3%. However, banks’ advanced security systems prevented a further £736 million from being taken.

As technology advances – through mobile payments, digital servicing, cloud migrations or AI – more cyber-attacks follow. Integrity attacks – which change data rather than destroying it – affect trust and are the new frontier in the war against cybercrime. Financial institutions need to continue and invest more in education and training, prevention, detection and recovery.