There is already an estimated $7B being spent on Artificial Intelligence, Machine Learning and Deep Learning (AI,ML,DL) in banking this past year. This is expected to double in less than 5 years. That’s certainly a reason for HPE to be interested but if your company is in this vertical you need to be aware of the investment being made by your competitors and what your company faces in terms of ‘staying in the game’.
In terms of Banking, there is a lot of action around mobile payments which has been intensified by the pandemic. Banks, merchants, retailers and every business accepting payments (that is every business) has to accept various methods including Near-Field Communication (NFC, that is, touchless) options. New innovations and Fintech are driving a lot of these new methods. Of course, regulators are still tightening requirements and compliance is ongoing – perhaps a great example of Continuous Development/Continuous Integration (CD/CI) as new regulations must be incorporated into the environments. Every week there seems to be a new breach and another major company downed by a ransomware attack. Security remains as the top priority for CIO’s for the past several years. Finally, banking, like retail, is being pushed into a 1 to 1 marketing environment as it faces younger and less loyal generations who are quite accustomed to changing providers. An ability to decrease both fraud and risk comes with a big payback and can affect the balance sheet of large financial institutions. Customer service has to be excellent in today’s environment or customers will change quickly. Great efficiencies can be dropped to services within this environment such as claims management and loan/mortgage approval systems. Robo advisors are doing an excellent job so far against their human competitors and at less fees. This will be an expanding area especially for younger investors who do not want to pay attention to the market. HPE has many solution areas within financial services around AI.
In banking and in Financial Services there are many factors disrupting this vertical. Hybrid Cloud and Multi-Cloud are a reality in FSI. It is helping organizations deliver on their digital ambitions but cloud isn’t just about the public players – it’s the experience. Getting the right mix is key – leverage SaaS offerings, and Hybrid offerings. Leverage the IP that providers such as the cloud providers and HPE with offerings such as Greenlake can provide to accelerate delivery. The key thing to remember though – it’s not just the technology! People, Process, Culture is key to making cloud work. Security is a top-of-mind concern for all organizations. Moving to a “zero trust” model – where nothing is trusted can help. Leverage built-in security and trust in platforms, such as HPE servers, including NonStop and our Silicon Route of Trust. It’s about moving from defense to offense. Again – cyber security is not just a technology issue. People and education/awareness are key. Banks hold vast quantities of data but there are some valid questions about how much of it is turned into information and insight. McKinsey estimates that banks do not realize the value of more than 80% of the total data collected by them. The treasure trove of data that Banks hold about their customers needs to be used better. Using this data – via concepts like big data, analytics, to feed AI, etc. – is key to being digital. Of course, regulatory burdens continue, just like death and taxes. The need to stay compliant is key. The focus is shifting to operational resiliency. Not meeting compliance comes at a price – including serious fines. Some could argue that in Europe at least, regulation has been driving innovation (Open Banking, PSD2). Regulators have called out the importance of AI and Data in Banking, Open Banking, PSD2, Open Finance, etc.
Can AI solve all banking issues and concerns? No, but it can help in various areas and is being viewed as an essential part of the new banking. It is worth taking a look.