New technology changes the operations and realities of organizations in all industries when it is widely adopted. It's no different with the latest innovation introduced by artificial intelligence, blockchain, and other technology. Here we look at the 7 biggest technology trends that will disrupt banking and financial services in 2020.

1. The 7 Biggest
Technology Trends
To Disrupt Banking &
Financial Services In 2020

2. © 2019 Bernard Marr, Bernard Marr & Co. All rights reserved
Title
Text
IntroductionIntroduction
Even though banking and financial services have been slower than other
industries to adopt the latest technology into their operations, financial
organizations are trying to catch up by incorporating artificial intelligence,
blockchain, and other technology to benefit their customers, remain
competitive and improve business results. Here are the 7 biggest technology
trends that will disrupt banking and financial services in 2020.
The 7 Biggest Technology Trends To Disrupt
Banking & Financial Services In 2020

3. © 2019 Bernard Marr, Bernard Marr & Co. All rights reserved
Artificial Intelligence (AI)
Although banking and financial services tend to be slower to adopt new
technologies, a PricewaterhouseCooper study confirms the majority of financial
services decision-makers are investing in artificial intelligence (AI)—52 percent
of executives confirmed they are making “substantial” investments in AI while 72
percent believe it will be a business advantage. One thing that will likely make
the rest believe in artificial intelligence’s potential for the industry are the cost
savings that are expected to be $447 billion by 2023.

4. © 2019 Bernard Marr, Bernard Marr & Co. All rights reserved
Artificial Intelligence (AI)
So, how do financial institutions use artificial intelligence? The most visible way
the banking industry uses artificial intelligence (AI) is for customer service from
chatbots and robots. Many of the largest financial institutions, such as Bank of
America and JPMorgan Chase, use AI to streamline customer service. Another
customer-facing way AI is deployed is to facilitate mobile banking that allows
24/7 access for consumers to conduct banking operations. AI is also
instrumental in the way financial institutions enhance security and prevent and
detect fraud. The technology helps financial institutions with risk management
and lending decisions and is foundational in making other technology such as
big data analytics, robotic process automation, and voice interfaces work.

5. © 2019 Bernard Marr, Bernard Marr & Co. All rights reserved
Blockchain
Blockchain technology, first used in the cryptocurrency Bitcoin, is a distributed
database that can keep track of transactions in a verifiable and permanent way.
The Harvard Business Review predicts that blockchain will disrupt banks the way
the internet disrupted media. Blockchains are transparent, highly secure, and are
relatively cheap to operate. As more financial institutions realize how blockchain
can improve security, save money, and improve customer satisfaction, more will
adopt the technology.

6. © 2019 Bernard Marr, Bernard Marr & Co. All rights reserved
Blockchain
Blockchain can support banking in several ways. Bitcoin showed how it can be
used for payments, but it can also be transformative in the way our capital
markets work by tokenizing traditional bonds, stocks, and other assets and
putting them on public blockchains. Blockchains would remove the gatekeepers
and third parties in the loans and credit system while also making it more secure
to borrow money and lowering interest rates. Blockchain could also eliminate
manual data reconciliation for bank ledgers. The way information and money
are exchanged today will be altered by smart contracts that operate from
blockchain technology.

7. © 2019 Bernard Marr, Bernard Marr & Co. All rights reserved
Big Data
One of the ways to determine a technology’s influence on an industry is to look
at how an industry is investing in it. The banking sector is currently one of the
top investors by industry in big data and business analytics solutions according
to the IDC Semiannual Big Data and Analytics Spending Guide. The amount of
data generated by the financial industry—credit card transactions, ATM
withdrawals, credit scores—is mind-boggling. And being able to put that data
to use to make business decisions and process it effectively to glean actionable
insights will be critical to staying competitive in the future.

8. © 2019 Bernard Marr, Bernard Marr & Co. All rights reserved
Big Data
Financial institutions can use big data to learn more about customers and be
able to make business decisions in real-time including learning about a
customer's spending habits, sales management such as segmenting customers
to optimize marketing as well as product cross-selling, fraud management, risk
assessment, and reporting, and customer feedback analysis. Not only does big
data analysis help identify market trends, but it also helps financial institutions
streamline internal processes and reduce risk.

9. © 2019 Bernard Marr, Bernard Marr & Co. All rights reserved
Robotic Process Automation (RPA)
Since robotic process automation can save labor, operational costs, and
minimize errors, many financial institutions are starting to leverage this
technology to create the best possible user experience for customers and to
remain competitive. In RPA, software is programmed to enable robots and
virtual assistants to complete repetitive and labor-intensive tasks correctly and
quickly without human intervention.

10. © 2019 Bernard Marr, Bernard Marr & Co. All rights reserved
Robotic Process Automation (RPA)
RPA, through customer service chatbots helps banks deal with the low-priority
queries from customers such as account and payment questions to free up
human customer agents to deal with the high-priority concerns. In insurance
companies, RPA is used to automate parts of the claims-handling processes.
Another way RPA influences financial institutions is to help ensure compliance in
the highly regulated industry. Today, thanks to RPA, customers can get a
decision on their credit card application within a few hours but sometimes
almost immediately after they submit the information. It’s also optimizing
mortgage processing.

11. © 2019 Bernard Marr, Bernard Marr & Co. All rights reserved
Cloud Computing
Cloud computing is technology for storing data and delivering computing
services, including servers, databases, networking, software, analytics and more
over the internet. When an individual or a business wants to use the cloud, they
will pay a cloud provider based on usage with pay-as-you-go pricing.
Cloud computing makes 24/7 customer service from anywhere possible. In
addition, cloud computing enhances the agility of financial institutions and
makes scaling up services easier and quicker. Since they only pay for services
they use, cloud computing can help financial institutions control costs. Cloud
computing also enables secure online payments, digital wallets, and online
transfers.

12. © 2019 Bernard Marr, Bernard Marr & Co. All rights reserved
Voice Interfaces
Chatbot solutions, enabled by sophisticated artificial intelligence, are being
deployed by financial institutions to reduce costs and meet customers'
expectations regarding quick response and effective issue resolution. Traditional
forms of two-way communication such as email, phone, and text can be
replaced with a chatbot. By 2020, chatbots are expected to handle no less than
85 percent of customer service interactions, according to Gartner.

13. © 2019 Bernard Marr, Bernard Marr & Co. All rights reserved
Voice Interfaces
Chatbots offer a nearly instant conversational experience that that can be
personalized, so customers get premium service expeditiously. Bank of America,
Capital One and Wells Fargo have used chatbots for years for simple account
queries, but today’s advanced chatbots could even offer financial advice. Bots
are also able to provide centralized financial management over the multiple
channels that customers interact with their financial institution, correcting what
had in the past felt disjointed. This technology continues to improve and will
empower customers to connect with their bank on their terms.

14. © 2019 Bernard Marr, Bernard Marr & Co. All rights reserved
Cyber Security and Resilience
In an industry dealing with sensitive personal and financial information, and
that's an attractive target of cybercriminals, security is paramount for financial
institutions. It would be a good idea for financial institutions to assume there
will be a security breach and plan for how to minimize the damage, because
preventing all cyberattacks is nearly impossible due to the diverse ways
consumers interact with their money and the numerous vulnerabilities that exist
regardless of how much time and energy is put forth to prevent cyberattacks.
From mobile apps and web portals to third-party networks and even
susceptibilities introduced by employees and customers themselves, safety is
never ensured even if you can thwart an attack periodically.

15. © 2019 Bernard Marr, Bernard Marr & Co. All rights reserved
Cyber Security and Resilience
Financial institutions must do more than invest in technical measures to protect
against cyberattacks. They must share knowledge and best practices with each
other, work with governments to ensure cybersecurity is prioritized, be proactive
about educating employees regarding their cybersecurity responsibilities and
the importance of following protocols, and reaching out to the public to help
them understand the situation and their role in keeping their personal
data safe.

16. © 2017 Bernard Marr , Bernard Marr & Co. All rights reserved
© 2018 Bernard Marr, Bernard Marr & Co. All rights reserved
Bernard Marr is an internationally best-selling author, popular keynote speaker, futurist, and a
strategic business & technology advisor to governments and companies. He helps
organisations improve their business performance, use data more intelligently, and
understand the implications of new technologies such as artificial intelligence, big data,
blockchains, and the Internet of Things.
LinkedIn has ranked Bernard as one of the world’s top 5 business influencers. He is a frequent
contributor to the World Economic Forum and writes a regular column for Forbes. Every day
Bernard actively engages his 1.5 million social media followers and shares content that
reaches millions of readers.
Visit The
Website
© 2017 Bernard Marr , Bernard Marr & Co. All rights reserved
© 2019 Bernard Marr, Bernard Marr & Co. All rights reserved
Bernard Marr is an internationally best-selling author, popular keynote speaker, futurist, and a
strategic business & technology advisor to governments and companies. He helps
organisations improve their business performance, use data more intelligently, and
understand the implications of new technologies such as artificial intelligence, big data,
blockchains, and the Internet of Things.
LinkedIn has ranked Bernard as one of the world’s top 5 business influencers. He is a frequent
contributor to the World Economic Forum and writes a regular column for Forbes. Every day
Bernard actively engages his 1.5 million social media followers and shares content that
reaches millions of readers.
Visit The
Website

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