Download Ascent Look Out 2016+
Banking

Highlights

  • FinTechs disaggregating banking value chain
  • Banks offering banking and non-banking products
  • Programmable APIs key to embedding new products
  • Cyber insecurity a threat to business
  • Machine learning will disrupt 40% of banking roles
  • FinTechs investing $12 billion in banking tech innovations
  • Business model shifted to customer 360° personalized banking
  • 11 top investment banks in Blockchain proof of concept

Digital Journey

CUSTOMER EXPERIENCE
Today’s customers expect their banking services to bring tangible benefit to their lifes, while being able to pay anywhere and anytime for any purpose. As mobile transactions rise, Retail banks are cutting branch numbers while making their remaining branches part of a true omni-channel banking experience.
BUSINESS REINVENTION
The political and regulatory agenda is encouraging new entrants and increasing competition. Together PSD2, challenger banks and Fintechs are pushing traditional banks to their limits. Open innovation labs are providing the ideal environment for banks to create new digital services.
OPERATIONAL EXCELLENCE
Digital technologies are helping to make straight through transaction processing and exception processing more efficient while making account opening faster, more secure and more responsive. In addition, digitized account servicing increases transparency and reduces cost.
TRUST AND COMPLIANCE
Financial institutions have seen regulatory standards, risk management and compliance tightened significantly, with the volume and granularity of regulatory reporting increased. Simultaneously, banks also have to deal with a markedly more hostile security environment.

Kuldip Chiheru

Global Financial Services – Strategic GTM Head

Michael Davison

Industry Principal, Financial Services

With all their ‘know your customer’ procedures and digital banking efforts, Retail banks are ideally placed to provide the trusted digital identity frameworks that are vital to the digital economy.

Technologies in the Digital Journey
Technology x y x (phone) y (phone) Impact Range Section Keys Description
Beacons 93 21 83 70 Early Adoption 2016 Low experience In the branch beacons allow an appropriate member of the bank branch staff to discreetly see when a priority customer walks into the bank and identify any accessibility needs that customer may have
Advanced data visualization 66 45 75 45 Adolescent 2018 Medium experience Kiosks found within the next generation of branches incorporate interactive videos and remote digital branches brought to life by immersive 3D visualization technologies. The images produced by 360° cameras help the support team engage with the customer, who may be looking to buy product and services as well as seek help or access concierge services.
Advanced quantitative analytics 73 16 82 15 Mainstream 2017 High experience,business Advanced quantitative analytics are redefining relationships in Commercial and Corporate banking. Delivered to relationship managers’ desktops, 3D visualization technologies provide an end-to-end view of financial data, from where the manager can drill down to find the detailed information they require. These advanced tools are also now in the hands of the corporate treasurer, who is employing them to optimize cash flow (amongst other things) in real time within a dynamic environment of ever- changing rates.
Augmented reality 75 35 66 46 Adolescent 2017 Medium experience Smart glasses – with their augmented reality capabilities – keep customers connected and informed wherever they are. By blurring real and virtual world they allow customers to engage with their bank and access bank services within the context of their current environment, talking face-to-face with an intelligent avatar sat alongside them in their living room, for example.
Blockchain 58 6 20 16 Adolescent 2017 Transformational business Blockchain will be the driver for innovation in new, permissioned private, public-ledger asset products that intrinsically embed enhanced security. In addition, it might significantly transform the way regulation and auditing is performed. Open ledger businesses are likely to develop faster in the peer-to-peer payments areas with transactions being more bi-lateral and simpler.
Cloud Service Integration 51 30 43 38 Adolescent 2018 High excellence Wholesale and Retail banks are migrating to the cloud on a large scale for all their non-financial support functions, including marketing, customer management, human resources and risk, to reduce capital requirement and increase agility. Cloud Service Integration is playing a key role in helping banks combine operational processes and technology platforms. Combining business processes in the cloud not only helps cut cost for payments, loans, credit checking and more, it also enables the next generation of automation that improves efficiency and cuts cost further still.
Context-rich systems 85 10 55 30 Early Adoption 2016 High business The customer expects the dialogue to be relevant and engaging. Context-rich systems evolve the conversation based on anything from the customer’s current products and any chancing circumstances discussed during the dialogue to local or even seasonal trends. These systems consolidate intelligence from diverse systems to proactively anticipate each user’s individual needs.
DevOps 88 7 70 25 Mainstream 2016 High excellence Combining software-defined technologies with DevOps development processes will allow banks to swiftly embrace next-generation platforms and delivery options – and progressively move to web-scale computing – without abandoning current infrastructure investments.
Digital wallets 83 16 59 60 Early Adoption 2016 Medium experience Embedded in customers’ smartphones, digital wallets are becoming increasingly popular. Their contactless technology allows banks to offer their customers an extremely convenient payment solution.
Distributed analytics 80.5 33 78 43 Early Adoption 2017 Medium trust Distributed analytics in combination with high performance computing then supports vital forensic analysis after any cybersecurity incident, helping to quickly identify where the attack started, who is behind it and how it was carried out.
Edge computing 63 19 36 45 Adolescent 2017 High experience,excellence Banks are increasingly taking advantage of a viable ecosystem of compute, storage and networking services made available through edge computing. Processing critical data near to its source brings a ordable scale to their computationally-intensive analytics.
High
performance computing
77 5 25 15 Early Adoption 2016 Transformational experience,business,excellence,trust Corporate and Investment banks are leveraging high performance computing and deep predictive analytics of massive datasets to optimize performance. While structurally little has changed, quantitative skills have become even more highly prized as interpreting the analysis becomes both more critical and more complex.
Hybrid cloud 87 20 65 50 Early Adoption 2016 Medium excellence Hybrid cloud has grown in popularity with banks finding its flexibility, cost, capacity, security and performance appealing. They’re starting to invest in ever larger scale migrations to cloud programs, which we anticipate will dominate the next five to seven years.
Internet
of Things
68 5 50 15 Early Adoption 2017 Transformational business Wearable devices are just one example of the vast array of data sources that together make up the Internet of Things (IoT). By combining data from these sensors with data stored in customer and product databases, insight from social media and other sources, IoT provides banks with an opportunity to understand their customers more deeply than ever before. That better understanding of each customer’s behaviors and desires means they can respond to customer needs more rapidly.
Machine learning 69 18 61 28 Early Adoption 2017 High excellence Assisted Personal Financial management will soon, for the first time, be within reach of the ordinary personal banking customer. Applications on smartphones and wearables that provide the intelligent, user- centric dialogue they need to help them work through their financial challenges – however great or small – will become available as early as 2016, be widespread by 2018 and mature by 2020. Behind them advanced machine learning algorithms such as deep learning interpret their needs and aspirations. More sophisticated Fraud and Financial Crime solutions are using machine learning approaches to detect fraud events with a higher degree of accuracy and enable action to be taken more rapidly to limit losses.
Next-Generation personal financial management 71 28 57 60 Early Adoption 2017 Medium experience Leading Personal Financial Management (PFM) solutions now go beyond simply aggregating, analyzing and presenting data on a customer’s personal financial product holdings. In the EU, PSD2 will accelerate adoption of PFM solutions in 2016-18.
Programmable Open APIs 66 16 42 37 Early Adoption 2017 High business Banks’ legacy IT estates are too complex and expensive to replace in total. Paths to modernization therefore now include deploying Application Programming Interfaces (APIs) to enable data to be made available for many different purposes in a standardized manner, reducing development time and cost and enabling improved operational agility.
Robotics 93 35 87 50 Early Adoption 2017 Low experience,business,excellence,trust Cognitive machine learning, natural language processing and robotics also automate middle office contract administration and customer, with intervention from highly skilled humans only required for complex exception management. The Bank of Tokyo- Mitsubishi UFJ introduced its first robot member of staff at its flagship Tokyo outlet: a humanoid customer service robot to respond to customer questions.
Self-adaptive security 91 6 80 17 Mainstream 2016 High business,excellence Banks are taking a proactive security approach to preventing cyberattacks.
Trusted probes are being deployed within secure environments to look for evidence of specific suspicious behaviors.
Self-adaptive security helps institutions anticipate threats. Behind the scenes streaming analytics and high performance computing analyze millions of events in real time.
Semantic technologies 78.5 35 70 72 Adolescent 2017 Medium business,excellence Enterprise-strength semantic technologies are helping banks to integrate the silos of financial and operational risk management, internal audit, fraud, forensics, training and compliance management. Behind the scenes the semantic technologies are enabling these intelligent systems to understand the relationships within and across data. Banks and payment services providers are less likely to suffer at the hands of fraudsters, hackers and, as a consequence, their regulators.
Sentiment analytics 94.5 10 89 27 Mainstream 2016 Low experience Social media is one of the streams feeding into the data lakes in which financial institutions can find the key information needed to build personalized products and services for their customers. Sentiment analytics are helping them manage their reputation and adapts their communications.
Software-defined technologies 89 17 70 60 Early Adoption 2016 Medium excellence Flexible software-defined technologies have transformed operations at many levels. For example, IT infrastructure, such as data centers and network resources and security can be optimized and delivered as a service. These virtualized environments have accelerated time for market for new offerings and new business models.
Streaming analytics 81 6 36 26 Adolescent 2016 Transformational excellence,trust Wealth managers and investments banks are also extending their leadership in the analytics space, particularly around real- time streaming analytics. The spread of this type of high-performance computing to trading is already leading to an increase in margins.
Virtual assistants 58 47 55 47 Adolescent 2018 Medium business Banks are leveraging virtual assistants to enable customers to have intelligent dialogue with the solution; understand and assess options available to them; obtain in-context information from trusted third party sources in real time and facilitate productive discussions with appropriately qualified customer advisors.
Wearable computing 82 27 52 61 Mainstream 2017 Medium experience The explosion of sensory data from personal wearables, amongst other things, is driving the creation of new value chains. These very personal devices do more than simply open up new insight into customers; they provide a new channel for banks to engage with customers in exciting ways. For instance, banks engaging with customers through their health tracker might reward them for improving their fitness levels.
Web-scale computing 77 29 74 38 Early Adoption 2017 Medium business Banks are progressing toward web-scale computing with its highly scalable, inexpensive open source-based hardware, integrated computer resources and self-healing capabilities. Its operational simplicity allows departments to be more agile while optimizing investments.

Radar View

Top