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Generative artificial intelligence (AI), autonomous systems and privacy-enhancing computing are the top three technology trends to gain traction in banking and investment services in 2022, according to research and consulting firm Gartner.
These trends will continue to grow over the next two to three years, contributing to the growth and transformation of financial services organizations.
“While growth is a top priority, the need to manage risk, optimize costs, and increase efficiency also requires new technology innovation,” said Moutusi Sau, a Gartner vice president analyst.
“Generative AI enables bank CIOs to provide technology solutions to the business in pursuit of revenue growth, while autonomous systems and privacy-enhancing computing are long-term solutions that offer new options for financial services business transformation.”
IT spending by banking and investment services firms is expected to grow 6.1% in 2022 to $623 billion. The largest spending category is IT services, which includes consulting and managed services, accounting for 42 percent of the industry’s total IT spending at $264 billion. The fastest-growing category is software, with spending expected to rise 11.5% to $149 billion.
Together, the three emerging technologies identified by Gartner contribute to the goals of business operations, growth and transformation, and demonstrate use cases in the banking and investment industries.
Trend 1: Generative AI
Gartner predicts that by 2025, 20% of all test data for consumer-facing use cases will be synthetically generated. Generative AI learns digital representations of artifacts from data and generates innovative new works that are similar to, but not duplicates of, the original data.
In banking and investment services, the application of Generative Adversarial Networks (GANs) and Natural Language Generation (NLG) can be used in most scenarios for fraud detection, transaction prediction, synthetic data generation, and risk factor modeling. It has potential because of its ability to take personalization to new heights.
Trend 2: Autonomous Systems
Autonomous systems are self-managing physical or software systems that can learn from their environment and dynamically modify their own algorithms in real-time to optimize their behavior in complex ecosystems. They have created a flexible set of technical capabilities that can support new requirements and situations, optimize performance, and defend against attacks without human intervention.
Currently, in a banking environment, autonomous systems are mostly software-based. However, humanoid robots are emerging in the intelligent branch, which are examples of hardware-based autonomous systems that cater to customers and customers. They can be applied to autonomous debt management, personal finance assistants, and automated lending. Robo-advisors are inherently low-level autonomous systems, although there are still trust issues due to their high degree of automation.
Gartner predicts that by 2024, 20% of organizations selling autonomous systems or devices will require customers to waive indemnity provisions related to their product learning behavior.
Trend 3: Privacy-enhancing computing
Privacy-enhancing computing (PEC) ensures that personal data is processed in an untrusted environment – an increasingly important point due to evolving privacy and data protection laws and growing consumer concerns. It uses a variety of privacy-preserving techniques to allow value to be extracted from data while still meeting compliance requirements.
Gartner predicts that by 2025, 60 percent of large organizations will use one or more privacy-enhancing computing technologies in analytics, business intelligence, or cloud computing.
In financial services, data has an inherent role in any analytical, computational and data monetization effort. The adoption of PEC is on the rise in use cases such as fraud analysis, intelligence operations, data sharing, and anti-money laundering. – arab trade news agency
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