Gartner report highlights the technology that is gaining traction in the financial services industry
Investment and banking services organizations are set to achieve growth and transformation over the coming years, thanks to three key technology trends.
According to a new report from Gartner, the trends gaining traction include generative artificial intelligence (AI), autonomic systems, and privacy-enhancing computation.
"While growth is the top priority, the need to manage risk, optimize costs and increase efficiency also requires new technology innovations," said Moutusi Sau, VP Analyst at Gartner. "Generative AI enables bank CIOs to offer technology solutions to the business in pursuit of revenue growth, while autonomic systems and privacy-enhancing computation are long-term solutions that provide new options for business transformation in financial services."
Gartner’s research predicts a 6% increase in IT spending within financial services firms in 200, totalling US$623 billion worldwide.
But how will the burgeoning tech being invested in be put to use within the businesses?
AI
Artificial intelligence (AI) is starting to be involved in many more areas of our lives – even if we don’t always know it.
For investment and banking firms, Gartner forecasts that use cases including fraud detection, trading prediction, synthetic data generation and risk factor modelling, will be the main growth areas.
AI also has the potential to supercharge personalization of services.
Gartner predicts that 20% of all test data for consumer-facing use cases will be synthetically generated by 2025.
Autonomics
When we think of computers doing this automatically, it’s probably at a relatively low level such as email software automatically moving incoming messages to a folder determined by rules that have been set by the user.
But autonomic systems take this much further with software that can learn from its environment and adapt its behaviour and algorithms. This has the potential to facilitate new capabilities without human intervention.
Autonomics also includes the development of hardware solutions such as humanoid robots that could be used as customer assistants or even be involved in lending decisions and debt management.
A low-level example of this technology is a robo-advisor, however trust issues will need attention to gain acceptance of a wider adoption.
Gartner predicts that by 2024, 20% of organizations that sell autonomic systems or devices will require customers to waive indemnity provisions related to their products’ learned behavior.
Privacy
Both consumers and regulators have expressed concern about privacy of personal and financial data amid the increased use of tech in financial services.
Privacy-enhancing computation (PEC) secures the processing of personal data in untrusted environments and Gartner predicts that 60% of large organizations will use one or more privacy-enhancing computation techniques in analytics, business intelligence or cloud computing by 2025.
