Finastra’s annual global State of the Nation Survey revealed that the financial services sector is investing in new innovations in artificial intelligence (AI), embedded finance, and Banking-as-a-Service (BaaS).
The survey collected data from 956 industry professionals between September and August 2023, gaining insight from financial institutions across France, Germany, Hong Kong, Singapore, Vietnam, Saudi Arabia, UAE, UK, and US.
The survey revealed that 87% of participants are excited about the pace of change, 83% are eager for new opportunities that will be presented to their financial organisation, and 81% are excited to see the change take place in the entire industry.
Generative AI is a major point of interest for financial institutions, with the survey finding that 83% of respondents reporting that their industry is eager to deploy AI technology, and 37% having already implemented or improved on their AI capabilities in the last year. 32% stated that thy will be using AI to enhance customer experience and create more customised services, and other common areas for AI usage was in ESG analysis, automation, KYC and AML, and risk-management processes.
The survey also discovered that there is an increased interest in BaaS, with almost half of the respondents having used BaaS or improved their BaaS systems in the last 12 months, demonstrating a significant jump from last year.
Despite the instability within the tech sector this year, the survey revealed that most institutions (69%) are optimistic that their investments will be able to resume in the first half of 2024. Majority of respondents also believe that open finance has been a game-changer in the sector, with 46% saying half of their users are employing open banking-enabled services.
Simon Paris, CEO of Finastra, commented: “Despite the challenging economic climate, it’s clear from our research that investment in AI, BaaS, and embedded finance remain key priorities for financial services organizations over the next 12 months, particularly as they seek to further enhance and personalize the customer experience. We share the industry’s ongoing commitment to ESG initiatives, to collaboration around open finance, and excitement in using advanced technologies like AI to help deliver on the opportunities ahead.”