BLOG

Beyond Artificial Intelligence: The New Technologies Banks Must Start Using Today

Published by Fintech Americas on Jun 12, 2023

Discover the emerging technologies with the greatest disruptive potential for the financial industry, including the Metaverse, Web 3.0, and quantum computing.

In an increasingly digitalized and hypercompetitive world, banks face the challenge of constantly adapting to improve the efficiency and personalization of their services.

With growing demand for faster, safer, and more personalized experiences, the financial industry is exploring new approaches to meet customer expectations.

No institution wants to fall behind in this race, and innovation has become one of the primary strategies banks are relying on to stay competitive.

A recent report by Forrester revealed that 77% of banking executives say their organizations will increase spending on emerging technologies this year.

Artificial Intelligence is currently the most talked-about technology, with 85% of banking executives stating they already have a clear strategy for adopting it in the development of new products and services.

However, there are several other emerging technologies with enormous potential to transform the industry as we know it today and directly impact key areas such as service speed and personalization.

Below, we present the four most important emerging technologies for banking beyond Artificial Intelligence.

The Metaverse

We are talking about a concept that once seemed like science fiction but is now becoming reality.

McKinsey & Company defines the Metaverse as a virtual universe made up of interconnected virtual worlds, social networks, and virtual economies.

It is a fully immersive experience that allows users to interact with one another and with virtual objects in real time, extending beyond virtual and augmented reality to include technologies such as blockchain, Artificial Intelligence, and 5G networks.

Banks are still experimenting with how to leverage the Metaverse to innovate products and services, but its potential is becoming increasingly clear.

One of its most significant opportunities lies in improving customer relationships by transforming digital experiences into more personalized and immersive interactions.

For example:

• users can create avatars and virtual environments that reflect their personal preferences;
• financial service providers can use these insights to tailor experiences to individual customer needs;
• banks could present financial information in more visually engaging ways;
• institutions could provide personalized investment recommendations based on each user’s goals and risk profile.

Additionally, the Metaverse offers opportunities to engage younger audiences.

New generations are digitally active, spend large portions of their time online, and are more attracted to innovative services such as cryptocurrencies and virtual reality than traditional financial products.

Latin America is already seeing immersive banking experiences in the Metaverse.

Banco do Brasil announced in 2022 the launch of BraBlox, the bank’s first experience inside the Roblox Metaverse platform. Designed for younger audiences, BraBlox guides players through puzzle-filled environments that teach financial literacy and help solve real-world budgeting and planning challenges.

Web 3.0

Web 3.0 represents the evolution of today’s internet toward a smarter and more semantic web, where machines can better understand and use information to deliver more relevant and personalized services and content.

This technology is also built around public blockchains, aiming to promote greater decentralization and democratization of the internet.

Regarding its impact on banking, Web 3.0 is expected to drive major advances in the short term, mainly because it enables greater data interoperability.

As a result:

• banks can access and share information more securely and efficiently;
• systems integration becomes easier;
• collaboration among financial service providers improves;
• operational efficiency increases.

From the customer perspective, two benefits stand out:

First, improved usability.

Web 3.0 uses more intuitive and personalized interfaces, making activities such as transactions and access to financial information smoother and more user-friendly.

Second, enhanced security.

Advanced technologies such as data encryption and multi-factor authentication provide stronger protection for data and transactions.

Banks are already beginning to adopt Web 3.0 capabilities.

For example, Banco Santander launched the first bond fully managed through blockchain technology from issuance to maturity.

This $20 million bond was issued more quickly, efficiently, and simply thanks to blockchain-based processes.

Low-Code and No-Code Development Platforms

Low-Code and No-Code platforms allow users to create applications without requiring extensive technical or programming expertise.

While Low-Code originally focused on accelerating the work of professional developers, No-Code evolved to enable virtually anyone to build software solutions.

Beyond application development, these platforms can also automate business processes such as:

• data analysis;
• document management;
• CRM workflows.

Their potential for banks is substantial.

Low-Code and No-Code platforms can significantly accelerate the development of applications and services by providing:

• pre-built components;
• visual interfaces;
• drag-and-drop tools.

This allows institutions to launch products and services faster and more efficiently while involving professionals outside traditional IT departments.

These multidisciplinary teams add value by:

• helping address technology talent shortages;
• reducing costs;
• bringing fresh perspectives from different business areas.

These platforms are becoming increasingly common in financial services.

For example, CredAbility used the low-code platform OutSystems to create a web and mobile application that helped customers access relevant financial information 33% faster.

Quantum Computing

Quantum computing is an emerging field that uses principles of quantum physics to process and manipulate information in fundamentally different ways from classical computing.

Unlike traditional bits, which exist only as 0 or 1, quantum bits (qubits) can exist in multiple states simultaneously through superposition.

This enables quantum algorithms to perform certain calculations dramatically faster than conventional systems.

Although still in an early stage of development, quantum computing is expected to significantly impact various areas of the financial industry.

On one hand, it has the potential to strengthen the security of banking systems and data.

On the other, its massive processing capabilities allow financial institutions to analyze enormous volumes of information more efficiently and accurately, enabling highly personalized services tailored to each customer’s needs and preferences.

By leveraging quantum algorithms and processing power, institutions could develop:

• more accurate risk prediction models;
• more advanced fraud detection systems;
• highly personalized financial management services.

These advances could directly improve operational efficiency.

Among the pioneers in this field is J.P. Morgan, which is researching how quantum computing can help solve challenges such as:

• option pricing;
• fraud detection;
• risk modeling;
• complex financial operations.

The Key to Sustainable Growth

It is clear that a new wave of disruption lies ahead that goes far beyond Artificial Intelligence.

Financial institutions face the challenge of prioritizing which technologies to adopt in order to achieve sustainable growth and avoid falling behind competitors and evolving customer expectations.

As emerging technologies redefine innovation, organizations must continuously evaluate which technologies offer the greatest strategic potential according to their goals.

Adaptation Is the Next Frontier

As we have seen, emerging technologies create exciting opportunities for the banking industry.

However, institutions must carefully consider how to adopt these technologies in ways that are profitable, intelligent, and strategically aligned.

Over recent years, banks and companies worldwide have invested trillions of dollars in innovation initiatives under the banner of Digital Transformation.

Some succeeded. Many failed. Others continue investing without clear transformation goals.

But regardless of how productive modernization efforts may seem, the concept of Digital Transformation contains two flawed assumptions:

1. that transformation is only about adopting new technologies;
2. that there is a final destination — a before and after.

Today’s reality tells us something different: the pace of change will never slow down.

Market dynamics, competition, and customer expectations will only continue accelerating, and the need for transformation will never truly end.

The most innovative leaders now understand that Digital Transformation alone is not enough to thrive.

The key lies in learning how to continuously adapt:

• responding quickly;
• thinking creatively;
• operating effectively in an environment of nonstop change.

Being adaptive requires understanding the true nature of adaptation and its implications for the financial industry — both organizationally and personally.

An excellent first step is downloading the exclusive eBook: “The End of Digital Transformation and the Beginning of the Era of Infinite Adaptation”, written by Chris Colbert, Chairman of the Board at Fintech Americas.

DOWNLOAD WHITEPAPER