Despite the significant changes already witnessed in the financial services industry over the past 10 years, the changes from 2018 to 2021 will be unprecedented.
The impact of a scaled-up digital transformation (DX) economy on our industry will see more enhanced customer experiences, a proliferation of next-generation security solutions, the expansion of cognitive and artificial intelligence (AI) technologies, and the modernization of back-office infrastructure using open API frameworks, all aimed to improve efficiency and overall profitability. As part of this digital economy, new rules for competitive success will be built, there will be new roles for IT leaders, and fintech vendors will be presented with new requirements and challenges to the status quo.
This IDC Financial Insights study presents the top 10 predictions for the financial services industries. Each prediction is shaped by a common set of key drivers that provides a planning tool for technology leaders and their line-of-business counterparts to use in their IT strategic planning efforts. The challenges of the industry today continue to be shaped by trying to match fintech innovations while resources are scarce and regulatory burdens persist.
The predictions in this research study are a culmination of the tenets of our research over the past few years. Innovation has reached the point of disruption for financial service firms of all sizes and geographic locations. The pace of technology change continues to be a major factor in IT investment, particularly as digital transformation strategies go from the drawing board to production. Driving this growth are advances in platform solutions, artificial intelligence and automation, and solutions aimed at improving risk exposure.
Top 10 Worldwide Financial Services Industry Predictions:
Prediction 1: By the End of 2018, 50% of Global Tier 1 and Tier 2 Banks Will Offer At Least Five External APIs, But Revenue from Digital Business Will Initially Be Disappointing
Prediction 2: In 2020, 25% of Banks Will Use Microlocation for Marketing and Enhanced Security Through a Combination of RFID and Beacons to Satisfy Multifactor Authentication and KYC Guidance and to Deliver Mobile (or IoT) Real-Time Offers Based on Location, Loyalty, and Business Opportunity
Prediction 3: By the End of 2019, 15% of Small and Midsize Banks Will Have Implemented Cloud-Based Compliance Analytics Platforms and Data Solutions to Improve KYC, CDD, and AML Compliance
Prediction 4: In 2018, Spending Will Rise by 20% on Next-Gen Security-Based Authentication Methods to Channels as Retail Banks Respond to the Imperative to Build Digital Trust with Their Customers
Prediction 5: By 2019, 35% of Insurers Will Deploy Cognitive Systems and/or Cognitive Robotic Process Automation for Intelligent Decision Making, Increased Automation, and Improved Operational Efficiencies to Deliver Contextual, Personalized, and Value-Centric Customer Experience
Prediction 6: In 2020, 25% of Top-Tier Banks Globally Will Have Started Working Toward a "Connected Core," Which Is More Than Double the Proportion in 2017
Prediction 7: By the End of 2018, 15% of Global Banks with Between $10 Billion and $500 Billion in Assets Will Have Partnered with, or Subscribed to, Cloud-Based Lending-as-a-Service Platforms for Consumer and/or Small Business Lending
Prediction 8: In 2019, P2P Transactions Worth a Total of $6.0 Trillion Will Be Made Worldwide Using Mobile Devices
Prediction 9: By the End of 2019, 30% of Large Banks Will Have Deployed Blockchain/Distributed Ledger Technology Projects on Blockchain-as-a-Service Platforms
Prediction 10: Corporate Banks Will Invest $2.2 Billion in Big Data and Analytics in 2018 — 20% More Than in 2017 — to Transform from a Transactional to an Insight-as-a-Service Business Model Offering Real-Time and Predictive Analytics on Cash Flow, Fraud and Compliance, and Scenario Modeling
To register for the on-demand web conference on these 10 predictions or to learn more about any of the IDC FutureScape Web Conferences, please visit: https://www.idc.com/events/futurescapes
You can find full context around these predictions in the newly published document, IDC FutureScape: Worldwide Financial Services 2018 Predictions (Document idc.com. Technology leaders and their counterparts in the line-of-business (LOB) operations can use this document to guide their IT strategic planning efforts.) on