According to Michael Abbott, banking is entering a new era in 2024 with the rapid maturation of artificial intelligence (AI), data processing and storage, and cloud computing. In Abbott’s top 10 banking trends for 2024, AI is the driving force behind each trend, causing fundamental changes in how banking is conducted. Some of the key trends highlighted include:
- The rise of Gen AI, with banks using AI to completely reinvent their enterprise and potentially boost revenue by 6% in three years.
- The use of AI to capture the digital dividend by personalizing the digital customer experience, offering the same authentic, personal experience through digital channels as traditional branches.
- The need for banks to improve their planning for risks that cannot be seen and to shift cybersecurity focus from prevention to resilience.
- The importance of creating a culture of curiosity, receptiveness, and continuous development to work alongside AI and preserve the human face of the bank.
- The power of AI in pricing, allowing banks to swiftly come up with targeted prices by considering thousands of variables and iterating to find the perfect price.
- The necessity of a cloud-first approach for banks’ operating models to handle the computing and data demands of AI.
- The need for a balance between regulation and innovation to ensure that regulations are not overly burdensome while still meeting the needs of regulators.
- The changing role of the IT function in banks as AI and new technologies shift priorities from maintaining infrastructure to helping invent, scope, and build new products.
- The potential for gen AI to reverse-engineer and modernize banking technology architecture, solving the problems caused by aging digital cores.
- The opportunities for banks to use AI to tackle qualitative problems that were previously unsolvable, helping reinvent cost profiles and set new performance frontiers.
Abbott emphasizes that while AI is important, its success in banking relies on how it is used, with a focus on people, strategy, and implementation.
