Artificial intelligence will deliver personalised experiences
and reshape the world of banking as we know it, according to a new 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.
Eugene Danilkis, CEO at Mambu, said: “The report shows the
world that banks were originally created to serve no longer exists.
Historically built to last, today banks need to be built to change. If
traditional players want to reposition themselves as lifestyle partners, in
tune with the modern banking needs of their customers, then they must evolve
rapidly – and without fear.
“Key to this will be their embrace of AI technology which
has broad ranging applications from fraud prevention and risk management to
delivering personalised customer experiences and driving efficiencies through
greater automation. But banks must act fast if they want to avoid getting left
behind. Only by leveraging the capabilities of AI and cloud technologies will
they be able to reimagine the customer experience and tap into new revenue streams
in a competitive market.”
“As the financial services industry continues to digitally
transform, there is an increased need for solutions that help businesses
deliver personalized experiences to customers,” said Joachim Wuest, Director,
Financial Services Industry, Google Cloud. “We look forward to partnering with
groups like Mambu to bring AI-powered solutions to banking organizations as
they move along their digital transformation journeys.”
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 AI, 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.