trend banks financial adoption management services digital
2019 Tech Trends for the Financial Services Industry## Exponential is the new linearInnovating at the speed of digital, often expressed as “exponential is the newlinear,” will be a top priorities for the financial services industry in 2019.For CIOs, this means enterprise-wide adoption of Agile and DevOpsmethodologies, further investments in multicloud, and significant leaps in thejourney leading to “Infrastructure as Code.”I also expect banks to increase investments in expanding digital capabilitiesas they accelerate the pace of digital transformation to address evolvingconsumer expectations and defend against digital challengers while extractingcost efficiencies from their internal operations.Looking ahead at 2019 — and further out over the next three to five years — Iforesee a number of disruptions and accelerating trends.## Short-term predictionsI see the following seven trends materializing in 2019:### Trend 1: Open banking accelerationFor most incumbents, open banking acceleration means exposing back-end systemsto modern front ends through the use of APIs, and continued partnerships withand acquisitions of innovative Fintechs. This trend will be furtherexacerbated by regulations such as PSD2 and GDPR.This can be viewed as a defensive play to diminish the threat of new entrants(including digital-only banks in Europe and online retail giants in Asiaoffering end-to-end retail, insurance and banking services).### Trend 2: Pervasive AI across the enterpriseArtificial Intelligence (AI) will expand beyond robo-investment and roboticsprocess automation (RPA) into areas such as customer contact center (smartassistants), fraud management (with a focus on biometrics), and employeeexperience.Pervasive AI will require the development of an AI-as-a-Service platform toenable data scientists to create and consume AI models with maximum IP re-use,seamless data access, and the ability to spike into the public cloud asneeded.### Trend 3: Multicloud adoptionMulticloud (“integrated” private and public) adoption will evolve beyond POCsand MVPs. 2019 will witness a push towards massive workload migration to thecloud, with figures from 20% to 50% advertised by various banks.This will trigger significant investment in automation, security and cloudmanagement to bring flexibility and agility features to private clouds. Itwill also create consistent cloud management and provisioning services andenable seamless movement of workloads across public and private.### Trend 4: Cybersecurity on steroidsFinancial organizations will continue to invest significantly in theircybersecurity capabilities, including the development of enterprise-wide end-to-end patching, further adoption of biometrics to replace traditionalpasswords, and wider implementation of zero-trust cybersecurity architecturesacross the organization.### Trend 5: From mobile device management to mobile data/informationmanagementData and information-level security will emerge to push cybersecurity awayfrom the device level. In the new BYOD reality, this will further secure keyinformation assets while addressing user privacy by segmenting personal/socialfrom business-critical zones within a single endpoint.### Trend 6: The next-gen omnichannel branch, hyperconnected with untetheredbankers2019 will see banks’ continued investment in redesigning their branches todrive end-user engagement and boost productivity. Banks will also focus onuntethering their bankers (replacing desktops with mobile/tablets) andimproving branch network connectivity (SD-WAN, wireless, 5G) as they adoptbranch of the future models.### Trend 7: Upskilling the IT workforceFinancial institutions will make IT workforce upskilling a top priority. Forinstance, with infrastructure migrating to code, companies will need toeffectively retrain and upskill current hardware engineers as “softwareengineers with a hardware spike.”Additionally, Corporate Digital Responsibility as an extension of CorporateSocial Responsibility will force banks and other large financial corporationsto evaluate the societal implications of their digital transformation choiceson their employees and customers.## What’s next?I see the following three trends developing over the next five or so years:### Trend 8: Mainstream 5G adoptionThe proliferation of 5G cellular networks will change the financial servicesindustry through increased speeds and system capacity, higher data rates, andreduced latency. 5G will force banks to reevaluate their LAN and WANinfrastructure plans at both branch and data center levels, with someorganizations pursuing the opportunity to play at both consumer and network-provider roles.### Trend 9: Blockchain will enable universal (self-sovereign) identityBlockchain use cases within the financial services industry will expand beyondinter-banking applications (e.g., capital market settlements and internationalpayments) to begin addressing the holy grail issue of “universal identity.”Blockchains run by banks may ultimately enable a self-sovereign identity modelwith KYC/AML attributes that is PSD2 and GDPR compliant.### Trend 10: Quantum computing will change the gameAdvances in quantum computing will lead to more accurate predictions in fieldslike algorithmic trading, public health, meteorology and more. In the shortterm, we’ll likely see investments in quantum-resistant cryptography to betterprotect from enhanced brute-force cybersecurity attacks as well as thedevelopment of quantum-enabled algorithms. Early availability of quantumcomputing on public could also significantly accelerate cloud adoption.