The banking sector is undergoing profound change due to a number of complex, combined factors: from technological disruption to regulation following last decade's financial crisis, as well as both economic and consumer trends. The Banking Technology Vision 2018 report by Accenture looks at how technology in particular is changing the shape of banking and picks out five trends to look out for. It states: “Each of these IT trends could potentially generate the next wave of industry disruption that banks can ill afford to ignore, even in markets that currently look stable and profitable.”

The company interviewed nearly 800 banking executives across 25 countries about technology advances in their organizations and across the industry. It found that:

• 86 per cent of banking executives agree that technology is increasing the level of integration between financial services and the rest of their customers’ lives;
• 71 per cent agree that AI builds customer trust and confidence;
• 45 per cent of digital-savvy consumers would like their bank to introduce new ways of communicating, such as wearables or virtual reality;
• 81 per cent agree organizations are basing their most critical systems and strategies on data, yet many have not invested in the capabilities to verify the truth within it;
• 94 per cent said they are confident in the integrity of the sources of their data – although the report found that half of the bankers aren’t doing enough to validate and ensure data quality;
• 78 per cent said they beieve automated systems create new risks, such as fake data, external data manipulation and inherent bias.

The report highlights five emerging trends that will shape the industry in the next three years:

Trend 1. Citizen AI

Although AI isn't new – the first neural networks for automated credit decisioning were built over 20 years ago and banks already make extensive use of AI to automate repetitive, rule-based manual tasks, such as AML transaction monitoring and credit card fraud detection – the technology is evolving to offer afar more comprehensive set of cognitive capabilities. AI won't cause a huge workforce displacement but banks should be looking at where AI can have the most positive impact and build collaborative working relationships in the context of AI.

Trend 2. Extended reality (XR)

Pioneering banks are beginning to use virtual reality (VR) and augmented reality (AR) to engage customers and employees, closing the physical distance gap. Banks should experiment with XR to establish a minimum level of internal expertise and, when customers are ready to use XR technology, develop XR apps to bridge the physical and digital worlds.

Trend 3. Data veracity

The majority of banks are increasingly using data to drive critical and automated decision-making but what happens if you can't trust the data? With data converging from all across the banking ecosystem, lapses in data quality could be costly. Banks will need to check the provenance, context and integrity of their data. Regulations are already driving organisations to check data processing policies but this will become increasingly important the more financial decisions rely on data. Banks should think of increased investment in data management as a value-generating initiative.

Trend 4. Frictionless business

Microservices and blockchain may be key technologies to help banks overcome the challenge of legacy systems. Banks should look at how they can split legacy systems and use “microservice architectures” to perform specialist tasks.

Trend 5: Internet of thinking

For banks to reach the dynamic physical environments they want to serve, they need to bring sufficient computing power. They should consider collaborating with cellular network operators to deliver location-based services and explore the potential for distributing more functionality to card schemes and processors.