Home » Top Tech Trends in BFSI that will shape the Industry in 2023

Top Tech Trends in BFSI that will shape the Industry in 2023

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During the last few years, there have been many watershed moments, from the pandemic and Ukrain wars to supply chain disruptions and the great recession. However, for the Banking, Financial Services, and Insurance industry, the pandemic was a pivotal point. It propelled financial leaders to abandon the traditional bottom-line metrics and develop strategies that could transform the industry and their future more quickly and radically through innovative technologies. According to a KPMG report, global fintech investment totaled US $210 billion in 2021 emphasizing the focus of BFSI players to invest in technology to propel their business.

Also, with the changing customer expectations, alternative business models, inherently innovative demands, and emerging technologies, the fintech industry needs to shift its focus from digital enhancement to invention. This will also determine which organizations will adapt and thrive in this evolving landscape. Here’s a sneak peek into the ‘Top Tech Trends the BFSI Industry’ will want to embrace to keep progressing.

1) Blockchain

Blockchain is set to take a center stage, as it is one of the leading innovations, promises to enable banks and financial service providers to ensure quick and secure transactions via decentralization. It increases operational efficiency within the organization as the data is highly secure and only people with the credentials can alter or change information. Also, with automated complaince and real-time settlement, blockchain will ultimately help financial organizations reduce costs and lower latency. According to research Fintech Blockchain market is estimated to reach $36.04 billion by 2028. Multinational financial service companies Wells Fargo and HSBC are using blockchain to settle foreign exchange trades while Master Card and Paypal allow payments on their networks to be made via blockchain currencies.

2) Cloud Banking

Cloud technology has emerged as a digital transformation accelerator for banking and financial businesses. Industry executives are quickly realizing that the cloud is more than just a technology; it is a platform for banks and other financial services organizations to store data and applications and access advanced software applications. According to MarketsandMarkets, the global cloud computing industry is expected to reach $947.3 billion by 2026. Cloud computing in the financial industry has become an engine to build new capabilities and services to fulfill business imperatives such as improved data security, cost optimization, agility, transformation, higher efficiency, and increased platform performance. According to IDC, spending on cloud services in banking is expected to increase by more than 16% year on year to $77 billion by 2024. Wells Fargo, one of the world’s oldest and largest banks, has revealed plans to shift all of its workloads to numerous public clouds over the next ten years.

3) AR/VR

Augmented and virtual reality have expedited digital transformation for financial institutions. According to Golmansach’s report, the augmented and virtual reality market will reach $80 billion by 2025. With AR VR, financial institutions can provide customers with an immersive and hyper-personalized experience. Customers can conduct financial transactions by visiting a virtual branch. Chatbots and virtual assistants have added a new level of personalization to the customer experience. Fidelity Investments, for example, developed ‘Cora,’ a virtual reality assistant that interacts with users and recommends stocks based on big data and the individual’s portfolio. Furthermore, some businesses are turning trading into a virtual experience by building virtual reality trading workstations. Swiss bank Swissquote launched VR software that uses a VR helmet to generate a 360-degree trading wall for customers to interact.

4) AI/ML

Artificial Intelligence and Machine Learning is revolutionizing the financial industry by leveraging tools like image recognition, robotic process automation, natural language processing, to optimize operations, predict market insights, reduce fraudulent activities and, unlock revenue growth opportunities, and automate manually intensive processes. As per Economist Intelligence Unit, 85% of the financial leaders plan on increasing their investment in AI ML solutions by 2025. JP Morgan Chase, one of the largest banks, deployed the Coin software, which leverages Machine Learning technology to review documents in seconds and saves 360,000 hours of work by lawyers and loan officers each year.

What does the future of Fintech look like?

The world of tech tools is finding resonance with BFSI players, notably with digital native fintech businesses, thanks to contemporary technologies such as AI/ML, AR/VR, Blockchain, and others. Also, with the online and offline worlds converging, fintech and other financial services institutions are becoming more open to opportunities making room for emerging concepts such as the metaverse. Metaverse is set to provide customers and businesses with greater autonomy, breadth, and opportunity for direct participation. Through predesigned relaxation zones and business centers, fintech firms could drive more delightful engagement and drive consumer satisfaction. Banking in the metaverse is pipped to drive higher transaction volumes as the payments environment becomes more diverse and streamlined. The platform also bodes well for long-term brand loyalty, as it builds on customer experience.

Innover’s data scientists and banking and financial services experts help your business operations and processes, capitalise on enormous future potential by deploying customized digital transformation technologies such as AI, ML, VR, AR, and blockchain besides preparing you for the future frontier in the Metaverse.

  • Innover Team  |  October 14, 2022   |  

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