SINGAPORE – Artificial intelligence will deliver personalised experiences and reshape the world of banking as we know it, according to a report from leading SaaS banking platform Mambu and Google Cloud.
The ‘Bank of the Future’ whitepaper identifies ‘ubiquitous banking’ as the next frontier in the digital financial revolution, and reveals three building blocks that will enable the future of banking:
- Customer-centric strategy – products and services built around the customer for the customer, embedding AI technology to hyper-personalise the user experience.
- Value-based AI use cases – applications anchored on business value (revenue growth, cost saving, or risk reduction) and customer value (customer experience or time to market).
- Composable technology architecture – flexible, cloud-based core banking software that enables true “plug and play” functionality to respond to changing customer needs, market dynamics, or technology trends.
Driving this change is a combination of disruptive forces in the market. The report shows that the pandemic has increased consumer demand for always on, personalised digital and mobile-first financial services. Unlike 20 years ago, traditional banks are no longer the go-to for those looking to move or manage their money.
With better access to cloud services and increasing competition from a new wave of fintechs and non-traditional players, incumbent banks are under threat as consumers turn to neo banks and digital challengers in search of a better customer experience and utility-led services.
The report points to changing regulation, such as the introduction of open banking and PSD2, as forces accelerating the disintermediation of traditional banking providers. With dedicated regulation now emerging for fintechs and digital banks in some jurisdictions, it’s a case of adapt or die for incumbent players.
But banks have one asset on their side – data. With around a billion credit card transactions every day, banks have access to one of the largest volumes of customer data of any industry. Using artificial intelligence, banks can harness this information to unlock unparalleled insights and growth.
McKinsey estimates that AI technologies could deliver up to $1 trillion of additional value each year for the global banking industry, combining a deep understanding of customer needs with the composable cloud architecture to roll out hyper-personalised services at scale.