Lending market expects modernization, integration and collaboration in 2024

2023 shone a light on the importance of agility. Banks around the world were forced to navigate volatile global markets and supply chains, changing customer behaviors and disruptive technologies, alongside pressures to strengthen their Environmental, Social and Governance (ESG) credentials. We do not expect this to ease in 2024, and yet many banks are struggling to adapt quickly enough. 

Whether they are providing retail loans to consumers, or working capital finance to corporates, financial institutions will face continued demands from their customers for quicker, more seamless, and personalized lending experiences. To meet these demands and avoid being on the back foot, institutions need to prioritize modernization – whether that be adopting a microservices approach, redeploying to the cloud or consuming ‘as a service’. By upgrading their technology, banks will be better equipped to adapt to changing market requirements, remain competitive, have access to better quality data, and securely decrease their time to value when bringing new services to market. 

For me, the biggest tech trend of the moment, and one that will only continue to accelerate in 2024, is Gen AI. According to our recently published Financial Services State of The Nation Survey 2023, more than four fifths (83%) of decision-makers say their institution is interested in Gen AI specifically, with 26% having already incorporated generative AI in some form. At Finastra, we’re very optimistic about its significant benefits for our customers and our people. I am thrilled about the quality enhancements it can bring in everything we do and the opportunity to give developers more time to unleash their creativity. It is an exciting time for the industry, and proof points will emerge as we test and learn with the technology. AI and machine learning are already being used to solve challenges in lending processes, such as document digitization by ‘reading’ documents, extracting information, and offering actionable insights.  

One of my primary beliefs is that finance is open, and ecosystems and networks will be critical for the success of financial services. We often talk about buy vs build, but for me, collaboration is essential. By integrating fintech applications into their platforms, banks will benefit from the latest technology to strengthen anti-fraud measures, access to ESG data and analytics, and process automation. Despite ongoing uncertainty in 2024, I am confident about the future. By embracing modernization, capitalizing on the potential offered by Gen AI, and leveraging the power of the network, the financial services industry has the opportunity to undergo a transformational shift.