Accenture Banking Blog
Guest blogger Ray Daly discusses new technological trends in banking and the transformational impact they will have in shaping the industry.

“It took 75 years for telephones to be used by 50 million customers, but it took only four years for the internet to reach that many users.”

That’s what journalist Lori Valigra used to highlight about how the advancement of technology has rapidly accelerated and changed the world like never before. Just like the invention of the automobile changed transportation exponentially or the advent of iTunes or Netflix transformed the entertainment industry, the rise of new technology, such as Artificial Intelligence (AI), Extended Reality and the Internet of Thinking will act as a tidal wave of transformation in the banking industry.

As a managing director at Accenture as well as the Irish banking practice sponsor, I have never been more excited about the future of the banking industry. Yes, the times are changing, but I believe these are fascinating days and banks should be just as enthusiastic.

When I started in the industry, the use of AI in banking was not on anyone’s radar. Then, very slowly, banks started to automate repetitive, rule-based manual tasks such as anti-money laundering (AML) transaction monitoring and credit card fraud detection.

AI—the collaborator and advisor

In 2018, the applications of AI far exceed this and will alter banking to a much greater extent. AI is on the cusp of offering a much more comprehensive set of cognitive capabilities that can sense, comprehend, act and learn. This will be seen in everyday banking life within the next couple of years – where AI will become a co-worker in parallel with humans in their organisations and act as an intrinsic collaborator and trusted advisor.

This, I believe, is the future and we are already helping our global clients in this area. We are delivering projects across the world that are helping banks to launch intelligent virtual assistants, such as chatbots, that use predictive analytics and cognitive messaging to offer financial guidance to the bank’s customers. There is, of course, a level of anxiety and trepidation around workforce displacement from AI progression. However, it is important to understand that, as AI replaces manual human tasks, new roles are created in areas such as training and design. AI will act as a binary partner to humans rather than a replacement. Accenture can help and is already helping and providing guidance to banks in this transition.

It is important that banks use these technologies to create competitive differentiation by overlaying the real world with digital enhancements to extend human reality.

Getting closer to customers

What is even more exciting to me is the growth of Extended Reality (XR) technologies, including Virtual Reality (VR), Augmented Reality (AR) and Mixed Reality (MR). The banking market is abuzz with the impact of XR. Crucial to the importance of this for banks is leveraging XR solutions to close the gap of physical distance when engaging with employees or customers: Instead of them coming to your doorstep, you will automatically be on theirs.

Going forward it is important that banks use these technologies to create competitive differentiation by overlaying the real world with digital enhancements to extend human reality. An application of XR that wowed me recently is how Korea’s Hana Bank now offers instant mortgages through its AR app. Using the app, customers can point the phone’s camera at a property and the app then gives the customer not only its price but also a real-time offer on a mortgage. The pricing of the sale and the risk assessment is done in the background and the customer can also apply for a mortgage digitally.

Banks can and should be extending their customers’ reality to open their lives and become a sacrosanct part of their customers’ life journey. Even if, while reading this, you don’t see a compelling use case now, it is imperative that your bank should invest in experimentation with XR to establish a minimum level of internal expertise.

Cloud safety will be a given

While XR extends human reality, the Internet of Thinking is starting to interconnect every facet of a person’s day-to-day life. Banks need to put smart banking on the edge of consumer interactions. Twenty-five years ago, banks were debating whether it was safe to execute electronic transactions over the internet. If we look forward, in the next few years the current debate about the safety of using the cloud and Internet of Thinking for banking will have similarly moved on. This will allow banks to deliver location-based services and avoid becoming a bottleneck for processing geofence events.

All these technological trends I have discussed have the likelihood to create the next phase of disruption in the banking industry. Even in markets that currently look steady and profitable, the banking industry must be prepared to manage the threats and opportunities arising from them and ensure that they are future-ready.

As we look forward into the next couple of years, the likes of AI, XR and Internet of Thinking, which are still in their infancy, will have exponential impacts on an industry we should all have great enthusiasm for. I am personally proud to be kicking off this Accenture Ireland banking viewpoint series and look forward to reading my colleagues’ points of views over the coming months.

Thanks to my colleague, Ben Russell-Carroll, for his insights.