Emerging technologies enabling NextGen Financial Services

Financial services have been the frontrunners in tech adoption and that is the reason the world could shift to the remote working model overnight. But the Covid crisis has accelerated the tech appetite of consumers who want immediate digital solutions from their financial service providers putting them under tremendous pressure to deliver innovative digital solutions within days.

Speaking in the CXO Panel Discussion, at The Economic Times BFSI Innovation Tribe Summit 2020, Charles Allen, Global Head of Business and Digital Architecture, Wealth and Personal Banking, HSBC, admitted that in the past few years they have been on the path of putting modern software development practices at the heart of banking:

“It started with changing our approach and developing technology around our customers – looking at customer feedback, reviewing customer journeys, researching and testing, reiterating and simplifying. Embracing technology is also about cross-functional working, where business and technology teams work together in an agile environment enabling weekly sprints and regular releases.

At HSBC, we have fully embraced technologies that are part of modern-day software development like containerization, stateless APIs with standard contracts, continuous integration and continuous development pipelines, automated tests, cloud solutions – all of these are bread and butter of how we bring digital experience to our customers.”

Elucidating on the innovation initiatives that are currently underway at Standard Chartered, Sarabjit Anand, Regional CIO Singapore & ASA, Standard Chartered Bank, added:

“We are intensely focused on innovation in 3 arenas – Cloud, APIs and Data. We have adopted a cloud-first approach and gone live with over 16 production applications in the cloud. Within next 2-3 years we expect to shift about 80% of our workload on the cloud.

For APIs we adopted a multi-pronged approach – first, we partnered with organizations and used their distribution networks to co-create products that enable financial needs for their clients. Second, we collaborated and co-created products and services with our own clients in different markets – BFSI, manufacturing and retail spaces, for mutual benefit. Third approach is to set up an entity to address unmet financial needs.”

Sharing a distinct perception regarding emerging technologies, Maria Mileder, Global Head – Innovation, PayPal, opined:

“At PayPal, we look at emerging technologies as a lifecycle. The early stage is research – checking up with the industry on their standing, what the lawmakers might be thinking about it and then comes the more mature phase where we execute the strategy, which is very exciting – this is where it gets competitive – we arrive at this stage after years and years of exploring.

A forward-looking company, we are doing a lot in the cloud space. However, being an open bank operating in the Euro zone we place paramount importance on security and are collaborating with the right partners and using the right technology with a lot of used cases around risk.”

Embracing Big Data, AI and ML

All the financial service providers are working with Data, AI and ML technologies extensively. Blockchain is also getting exceeding attention since utmost attention is being bestowed upon security and transparency. According to HSBC’s Allen, AI and ML is helping them in many ways – making onboarding clients smoother and faster, implementing self-quality checkpoints and reducing the number of ATM cash refilling.

Standard Chartered’s Anand further elaborated on how they are using these technologies:

“In the arena of Data, AI and ML – we started with used cases around regulatory reporting and gradually matured into converting these data marks into data lakes, which can be used by businesses and stakeholders in different dimensions like creating hyper personalization to enhance customer experience or extract insights to put forth attractive offers and deals.”

Expounding on the role of technology and data in decision making, Jaya Vaidhyanathan, CEO of BCT Digital, said the need for Big Data comes from the perspective of relevant data not being available. So, what you do is, use available data points from a huge pool or the realm of Big Data to arrive at a clear “Yes or No”. Technologies like Big Data, AI and ML give you the power to examine data points that a traditional bank would never use to arrive at a right decision.

Indeed, financial services companies have “all hands on deck” to imbibe new technologies, with prime importance being given to AI, ML and Big Data. Good news is they are collaborating across industries, are open to experimentation and moving at great speed albeit with caution, and if the same spirits are kept up, a leapfrog to future certainly looks like a possibility.