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Experts have predicted 2017 to be a dramatic year for financial services. Banks will be increasingly meeting with challenges from FinTechs and other alternative players who are racing forward to innovate services, develop new products, and mine customer insights to provide seamless banking experiences.
As banking trends accelerate towards digitization, financial service providers are likely to intensify their engagement with the FinTech ecosystem. Automation, Cloud-based platforms, robotic processes, and cognitive technologies are expected to be the top priorities, which will replace the legacy core systems. The question is, how will the financial industry respond?
Technology integration will invariably infuse high efficiencies across the organizational system, but it needs the right corporate governance and structure for accurate implementation. In the future, technology partnerships will play a key role, helping banks transform their traditional systems into future assets.
Financial Services are Opening a Brave New World
While technology has turned many business sectors on their heads, the same can’t be said for the financial industry - but that’s about to change. Thanks to the increasing customer demands and preferences, banks and financial organizations are facing a need for innovation. Thus, in 2017, more banks will be seen partnering and collaborating with technology firms to develop new products and services to cater to the diverse range of expectations. Trends that are likely to surface this year include:
Dependence on cloud
Banks are anticipated to increasingly use cloud services to manage their core banking activities. This will help them leverage several benefits such as enhanced scalability, flexibility, and agility.
Use of customer analytics
A major percentage of analytics initiatives are expected to focus more on improving customer experiences. Analytics-driven personalized services and mobile banking services will be top priorities in the near future.
And it’s not just that; financial experts also foresee banks embracing advanced analytics to:
- Leverage comprehensive risk management policies
- Strategize emerging business opportunities
- Quickly detect fraudulent activities
- Heighten customer experiences
More focus on security
The annualized cost of cyber-crimes in financial services has reached devastating numbers. Capgemini predicts a 40% increase in managing the security infrastructure by end of 2025. Financial service providers, to counter the menace of cyber threats, are expected to invest more in security systems.
Replacement of legacy systems
The current business landscape demands financial services to have the capability to introduce rapid change, or else they risk losing market share quickly. That can mean losing incremental revenue opportunities that can't be recovered once lost. Financial service providers have started realizing that the need for speed and agility are crucial factors that can't be ignored anymore. In fact, 80% of the banks are very likely to replace their legacy systems within the next 5 years.
Adoption of distributed ledger technologies
Banks are finding new opportunities in distributed ledger technologies such as blockchain. Distributed ledgers are expected to lessen infrastructure costs by $15 billion - $20 billion per annum by 2022. The technology will also help incorporate speed, efficiency, and transparency into the banking system.
Overall, in 2017, banks will intensively work towards:
- Integrating compliance practices and risk managements
- Ensuring increased regulations
- Enabling employees with improved decision-making tools
- Formulating compliance procedures for third party vendors
F3 Technology Partners, a close observer of the financial services sector, understands the IT trends that will refine, reshape, and drive technology transformations in the industry.
Specializing in delivering flexible solutions that reduce time, effort, and the cost of developing and maintaining a full-fledged IT infrastructure, F3 addresses critical aspects like:
- Handling increasing regulatory pressures
- Putting into place a comprehensive credit risk management program
- Forming a competitive landscape for the next-generation consumers
- Consolidating different banking channels
- Formulating new ways for developing customer insights, as well as to manage, store, and utilize the information effectively
F3 provides IT support and expertise to leading global players in the financial industry through their partnership programs with some of the best and most trustworthy IT hardware and software brands like Cisco, NetApp, Veritas, VMWare, and others. The company’s IT solution portfolio is designed for firms of all sizes, and includes:
- Monitoring data security, compliance, and regulations.
- Enabling credit and organizational risk management.
- Providing seamless storage solutions
- Enhancing customer experiences through power data analytics and capabilities.
- Comprehensive disaster recovery and backup
With their solid strategic alliance with leading technology firms, F3 helps banks and FinTechs to stay in sync with the latest technology trends while maintaining efficiency, cost effectiveness, and competitive edge in the dynamic financial markets.
Check out this Case Study, where F3 assisted Chelsea Groton Bank in their efforts to shorten RTPO, shrink operational and capital expenditures, and provide ultra-fast recovery measures. If you have questions or would like more information, contact us.