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Our technical directors share their predictions and highlight the key challenges and opportunities facing industries in the next 12 months and beyond. Dharmesh Gedia will tell you all about his expectations for the Finance & Banking sector in 2025.
Many financial institutions rely on legacy database systems but over the next year, the financial services sector will be pushed towards data and database modernisation to harness AI’s full potential − a technology that relies heavily on a robust data foundation. Banks have historically been hesitant to overhaul their databases, concerned about the cost, effort and risks involved. However, banks will find that their outdated systems limit the effectiveness of AI to improve customer experience, security and fraud.
While financial institutions have widely adopted cloud and SaaS solutions, database migration has often been pushed aside due to the complexity and perceived risks.
This will ultimately transform banks’ operational resilience and enhance their abilities within regulatory compliance and security whilst also optimising cost by the move from complex on-premise databases to the cloud and leveraging the scalability it provides.
In 2025, the banking experience for customers is going to undergo further transformation. Rather than the limited, one-size-fits-all digital interactions of the past, banks will offer customers hyper-personalised experiences to retain customers from the threat of challenger brands.
By leaning on AI, banks will be able to tailor services based on an individual’s banking habits and preferences. For instance, AI will allow banks to recognise specific budgeting behaviours or recurring activities, offering tailored advice and guidance. Moreover, banks will be able to use AI agents to alert and provide customers with information to reduce fraud or make them aware of new services and features.
Hyper-personalisation in banking opens up a great deal of new possibilities. Customers will be able to have greater control over the services they receive, which feel not only be personalised but also protective. However, striking the balance between automation and trust will be key. Banks will need to help customers feel confident in interacting with AI agents while still giving them the option to speak to a representative. The banks that leverage AI to empower customers without completely taking away human interaction will offer the best experience.
The AI cyber arms race will only intensify as both financial services organisations and attackers accelerate AI adoption. Instead of relying on call centre cons, fraudsters will be able to scale operations through AI, deepfakes and bots, helping them to execute scams more easily, at scale and at a lower cost. In one case last year, engineering group Arup lost $25mn after fraudsters digitally cloned a senior manager to order financial transfers during a video conference. The threat level is only going to increase, making customer security harder for banks.
Human investigators will see a huge cut in the cases they need to review, by detecting suspicious, potential money laundering activity faster and more precisely with AI. AI-driven AML systems will also function as real-time triage tools, constantly assessing threat activity, flagging anomalies, and escalating critical cases for human intervention or AI-initiated actions.
As threat actors take advantage of the opportunities AI offers with both hands, financial services organisations must also use the technology to boost threat and fraud detection. In such a high-stakes environment, if you’re a financial services organisation not in the AI arms race, you’re losing it.
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