Navigating the future with trust in banking and finance
- Posted on May 2, 2023
- Estimated reading time 4 minutes
The current geo-political and socio-economic climate is turbulent, to say the least. Following the unpredictability of the pandemic and the inflationary headwinds plaguing the economy as an aftermath, many banks and financial institutions feel that they have jumped out of the frying pan into the fire. Yet, technological advancement has emerged time and time again to bring connectivity, confidence and context about the changing landscape to this sector. It’s true that recent uncertainty comes hand-in-hand with a lack of trust, and institutions exploring new technologies are unable to thrive unless their approach is rooted in foundations of trust and transparency.
As we reach a crucial ‘what’s next?’ point in tech, Avanade Trendlines has identified and researched five key trends that will shape the next decade in banking and finance, and how each one is underpinned by the need to satisfy customers’ desire for trust.
The evolving relationship between tech and trust
Generally, trust in technology has been associated with security – similar to trust in finance. When banking and finance institutions say they will follow ethical practices around data, technology and information sharing, our society expects them to be true to their word. The rapid growth in digital citizens and systems has chipped away at society’s construction of trust – people are struggling to keep up with the pace of innovation and how it affects employees, products, customers and the way they bank across the board. Changing perspectives doesn’t happen overnight. As much as technology has the power to create new opportunities and be a force for change, it also runs the risk of moving too fast and public confidence might struggle to keep up.
Trend one: The democratization of work
For the first time, employees are in the driving seat. The democratization of work, fuelled by technological adoption and support, is helping employees develop new skills and capabilities, choose their working relationships with employers and work from anywhere. People are finding more meaning in their work, and even the definition and purpose of a ‘institution’ is evolving – which is largely disruptive for the finance industry that continued to follow traditional working practices more so than other industries.
Trend two: Resource-aware systems
Environmental uncertainty is putting the fragility of energy systems, sustainability reporting standards, and infrastructure improvements in the public spotlight. Questions surrounding greenwashing, environmental partnerships, cost of living crisis and resource usage are arising in the capital-rich financial industry, and the organizations that can answer these questions in a transparent manner will be the ones that forge strong bonds with communities and partners, therefore creating solid foundations for growth.
Trend three: Secure cooperative architectures
Privacy and security have never faltered as key priorities for any finance organization, but what do they look like when businesses partner and increasingly collaborate with one another in complex technological landscape? Protecting infrastructure, maintaining accountability and keeping up with societal expectations is made easier when organizations start working together through multiparty systems. Overall, these strategies will enhance customer trust.
Trend four: A new software canvas
Arguably, the physical and digital worlds are already merged in many ways. As we use technology to further enhance our human capabilities (e.g. digital twins and biometric data), new opportunities, questions and ethical concerns come into play. To ensure that these creative and forward-thinking physical experiences are positive for all parties involved, organizations in banking and finance need to remain considerate, respectful and, crucially, transparent.
Trend five: Safer and more resilient AI
The nuanced and complex safety issues surrounding AI form the next hurdle in its adoption. Development standards and control frameworks are rare, yet the banking and finance industry relies on AI to make automated decisions that impact the physical world, such as chatbots for customer service and algorithms to approve credit card applications. Creating and deploying responsible and resilient AI is everyone’s job, and the role of banking businesses in this mission will shape the next decade.
Avanade Trendlines – Inspiring research for our innovative future
This is just a snapshot of how trust will be highly impactful in shaping customers’ virtual and physical futures when they are banking and managing their finances. Throughout 2023, we will revisit, re-analyse and re-report on these five types of systems and give you the information you need to navigate the future.