Finastra’s latest global State of the Nation Survey has highlighted the financial services industry’s growing investment in cutting-edge technologies, including artificial intelligence (AI), embedded finance, and Banking-as-a-Service (BaaS).
Conducted between September and August 2023, the survey gathered insights from 956 professionals across financial institutions in a range of countries, including France, Germany, Hong Kong, Singapore, Vietnam, Saudi Arabia, the UAE, the UK, and the USA.
The findings revealed a strong enthusiasm among participants, with 87% expressing excitement about the rapid pace of transformation in the sector. Furthermore, 83% are optimistic about the new opportunities this shift will bring to their organizations, while 81% are looking forward to the broader changes expected across the industry.
Generative AI emerged as a focal point for many organizations, with 83% of respondents indicating a strong interest in deploying AI technologies. Notably, 37% have either implemented or enhanced their AI capabilities within the past year. Among those leveraging AI, 32% plan to use it to improve customer experiences and offer more personalized services. Other prevalent uses of AI cited include advancements in ESG analysis, automation, Know Your Customer (KYC) and Anti-Money Laundering (AML) processes, as well as risk management strategies.
The survey further indicated a marked increase in interest in BaaS, with nearly half of the respondents either utilizing BaaS solutions or upgrading their existing systems over the past year, representing a notable surge compared to the previous year.
Despite the challenges faced by the tech sector in 2023, optimism remains high, with 69% of institutions anticipating that their investment efforts will resume in the first half of 2024. Respondents also recognized the transformative impact of open finance, with 46% reporting that a significant portion of their users are taking advantage of open banking-enabled services.
Simon Paris, CEO of Finastra, remarked on the findings, stating, “Even amidst a challenging economic environment, our research clearly indicates that financial services organizations are prioritizing investments in AI, BaaS, and embedded finance over the next year. These technologies will play a crucial role in enhancing and personalizing the customer experience. We share the industry’s commitment to ESG initiatives, fostering collaboration around open finance, and leveraging advanced technologies like AI to capitalize on the opportunities that lie ahead.”