Artificial intelligence (AI) is currently seen as one of the hottest topics in the financial services industry. GFT’s Digital Banking Expert Survey 2017 reveals that in large institutions the percentage of respondents who see value in AI solutions is an impressive 94 percent! Moreover, the Banking as a Platform (BaaP) approach with an open API business model is perceived to be a relevant criterion in order to shape the digital bank of the future. Read on for more results of this year’s survey.
To gain insight into the digital banking world, GFT once again conducted its yearly Digital Banking Expert Survey. 285 professionals from small to large retail banks were personally interviewed to gain knowledge on current financial topics like digitalisation of the banking industry, Artificial Intelligence and Bank as a Platform. The survey focussed on eight countries: Brazil, Germany, Italy, Mexico, Spain, Switzerland, the UK and the USA.
The global results show that a considerable proportion of banks across all countries have a defined digital transformation strategy in place or are currently developing it. But what about the rest? What is keeping banks from implementing digital technologies within their organisation? The main challenges for banks in implementing a digital strategy are the integration of legacy systems with new technologies (59 percent), security, as well as privacy implications (57 percent) and a lack of internal expertise within the organisation itself (51 percent). The key driver, especially for large, global acting banks, is the desire to satisfy their customers’ expectations.
Artificial intelligence is just around the corner
AI is set to turn banking and insurance on its head over the course of the next decade. GFT’s Expert Survey shows that 83 percent of all respondents see value in AI. Brazil, the UK and Mexico lead the way in terms of placing importance on AI, while in the traditionally more cautious Germany and Switzerland, only a few perceive AI to be strategic. With the implementation of AI, the questioned experts expect to achieve improvements across a wide range of business functions, ranging from Back Office to Customer Services Centres and Personal Financial Planning and Sales. What about the expected benefits? Operational cost reduction (71 percent) and achieving greater customer engagement (64 percent) are most important here. Especially in the retail banking industry, which has access to vast amounts of unstructured data like customer information that isn’t currently being used to its full extent. By utilising cognitive banking methods based on self-learning systems, this unstructured data can be processed and organised to generate weighted hypotheses on decision-making that services customers better, and increases revenues.
Key driver: customers’ satisfaction
The results show that the number one driver for improving the level of digitalisation within financial organisations is to satisfy customers’ expectations, as 60 percent of all respondents claim. Following customers’ satisfaction are increasing revenues from new services or products (51 percent) and operational cost reduction (47 percent). With that result, the number one driver for digitalisation remained the same as that from GFT’s 2016 Digital Banking Expert Survey, showing that the customer really is the centre of attention.
The Bank as a Platform vision
When it comes to concrete strategies, the BaaP approach seems to be in favour with many institutions. The BaaP vision is the idea that banks distribute their own products, as well as those of third parties, through Open APIs and front-ends, allowing customers to easily and comfortably exchange information with multiple suppliers. 69 percent of all questioned banks have considered BaaP, and also 69 percent of them say BaaP will have a great to moderate impact on their business model. Increased customer engagement is seen as the main benefit of BaaP (62 percent), followed by the ability to develop new applications (55 percent) and lower operational costs (51 percent). The UK and Spain are leading in the adoption of BaaP, while Mexico, Brazil and Italy remain cautious with a large proportion of respondents not considering it at all.
Further information about GFT’s Digital Banking Expert Survey 2017 can be found here on the GFT Website.