Eight points of digital transformation in financial services to observe in 2020

The digital transformation is already a reality in the market and will certainly continue to be a topic of persistent discussion to be reached by traditional financial institutions. And it will be particularly important in 2020, when we will see important regulatory and structural changes. In addition, consumer behavior with the use of new financial technologies has changed the way we handle banking services.

Drawing this scenario, there is no need to wait for the new year and its resolutions to understand the basics about the digital revolution that we will witness in the sector in the near future. To this end, I have surveyed the eight main drivers of digital transformation in banks and financial institutions that we will observe next year.

Machine Learning on the customer journey
Banks fully recognize the potential of AI and its component, Machine Learning, to transform their operations. They understand that these advanced data analyzes will increasingly help them better identify profitable customers and business opportunities.

Banking Artificial Intelligence
Data integration coupled with regulatory governance, especially with open banking, will be a big step. The use of Artificial Intelligence has revolutionized the prevention of money laundering and fraud. But banks are still beginning to tap their potential with a focus on new applications for the consumer experience at the cutting edge. The real value of AI is in helping to understand its users. And this is priceless both from the perspective of service security and from the customer journey.

Deep Learning
Deep Learning is a form of Artificial Intelligence better able to understand complex activities. Greater analytical personalization of the companies' consumer base, or improving accuracy and performance in applications where neural networks are used for a long time are some of the possibilities of its use. Through more accurate algorithms, and computing power, we can add greater depth.

Consumer Experience
Mapping and optimizing the consumer journey is a common challenge in the era of omnichannel. Financial companies need to guide their users through the journey with the best possible "next action". Traditional marketing automation has reached a point of stagnation in this process. The scale and complexity of this challenge are perfect opportunities for applying artificial intelligence with a focus on the consumer experience.

Banking Analytics
Financial institutions are using a range of solutions to support the collection and analysis of consumer data for more strategic decision making. CRM solutions, predictive analytics, social media monitoring, smart virtual assistants and mixed reality solutions are expected to become much more significant in delivering value experiences to consumers.

Compliance and regulatory technology
Artificial intelligence and the future of regtechs (regulatory technology) is the big question. As part of an advancement process, organizations are using AI, machine learning and automation of robotic processes to smooth integration and processes between new regtech solutions with existing compliance solutions and legacy platforms. The new regulations, such as LGPD and open banking, are extremely dense and complex. It is in these cases that technology can assist in reducing the workload involved, resulting in increased accuracy.

Predictive anti-fraud
Detecting and preventing fraud are tasks that must consider multiple channels and business lines of banking institutions, and that can be monitored in real time. Such a solution simplifies data integration, combining internal, external and also third party information to create a predictive model that responds to the needs of each organization.

Open Banking
The fundamental principle of open banking is the ability of third parties to be able to access transaction data that were previously proprietary, opening up possibilities for expanding new services for users. In Europe, where legislation is already in force, the impact has not yet given the desired impression. However, with the approach between traditional institutions and startups, the impact of open banking and banking services will be profound.

* Luiz Riscado, Sales Director at SAS Brasil

Warning: The opinion presented in this article is the responsibility of its author and not of ABES - Brazilian Association of Software Companies