Banking and Finance
Challenges & Opportunities
Banking and Financial service firms are facing many challenges today.
Most of it has to do with the rapid changes in technology. While the vast majority of financial firms have embraced the technology revolution, there are still many challenges these companies have to face.
Eliminating Data Breaches
Financial service firms are prime targets for cybercrime. Because of the sensitive data they carry, they are more likely to be targeted. In fact, financial service firms were hit 300 times more than other business.
In 2018 financial service firms were hit 819 times, an increase from 69 incidents reported in 2017. The total number of cyber-attacks won’t be known until well into 2021, but there has already been a number of data breaches this year.
On March 22-23, a hacker gained access to Capital One’s consumer and small business credit card applications from as early as 2005. According to Capital One, approximately 140,000 social security numbers and 80,000 linked bank account numbers were exposed in the U.S. Also, about 1 million Canadian social insurance numbers were breached.
Each attack is costing financial service firms millions of dollars. They need to continue coming up with innovative solutions to stay ahead of these cybercriminals.
Keeping Up with Technology
Business growth is very important for financial firms, but in order to grow, they must spend money updating their technology. According to a report from Protiviti, financial service firms must continue to invest in technology such as robotics and other workflow automation tools to increase their efficiency and reduce the costs associated with operational, risk management and compliance.
Firms must also modernize their technology platforms and data storage so they can enable big data solutions such as AI-supported digital customer support assistants.
Financial firms must also consider consolidating platforms and provide a more efficient, customer-friendly experience across internet, mobile and physical locations.
Incorporating AI
Major financial service firms are achieving a 19% growth in revenue according to a study from Deloitte.
Deloitte found that 30% of financial service firms who they describe as frontrunners are more adept at utilizing AI which is helping them increase revenue faster than their competitors.
These frontrunner firms are also twelve times more likely to notice the importance of AI to their businesses than late adopters. Frontrunners are quicker to recognize the importance of AI and are motivated to implement it. While other firms may recognize the importance of AI but are more hesitant to use it.
Deloitte’s study also discovered that 45% of frontrunner firms are investing $5 million dollars in AI initiatives. That’s 3 times the rate of late adopters. 25% of frontrunner firms are spending $10 million dollars or more in AI. 70% of these firms plan to increase their spending by 10% during the next fiscal year.
60% of frontrunner firms define success by increased revenue and 47% say customer experience has improved. Frontrunners whose businesses have increased revenue, improved customer experiences and reduced costs are the most effective in finding and funding more diverse business opportunities.
AI is definitely the future in financial services. Companies that want to thrive need to incorporate it as soon as possible.
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