Reimagine banking: Unlocking new opportunities in a disruptive landscape

Picture this: It’s 2030, and you’re stepping into an autonomous taxi. It was waiting for you at the curb when you exited the apartment building. You smile, dreaming about how you’ll furnish your new apartment with breathtaking views. But then doubt creeps in – can you afford it? Can you get your offer in fast enough? Will it be accepted? As the car smoothly merges with the traffic, your smartphone chirps, “Hey Daragh, I see you’ve been looking at apartment 627 again”. It continues, “This is your third visit in the last few weeks. Your calendar shows a meeting with Millenium Real Estate, and I can see the for-sale listing online.” Intrigued, you reply “Yes, that’s right.”

“I’ve taken the liberty of looking into some financing options for you. After negotiating with a dozen mortgage providers, I’ve narrowed it down to these three. I recommend the mortgage from provider X because they have a partnership with your preferred airline, and you can use miles to reduce the cost of the mortgage.” This is good, you think, because your new job means you’ll be traveling a lot, earning more miles.

Your personal AI continues, “You’ve been provisionally approved. Would you like me to submit the offer and get the legal AI working on the paperwork?” It giggles, “Paperwork – sorry, you know what I mean, there’s no actual paper involved. Should I proceed?

“Yes please – authorized”, you say and go back to daydreaming.

The future is closer than it seems

Autonomous taxis are advancing rapidly. Croatia expects the first driverless taxis to hit the streets of Zagreb by 2026. Waymo’s rollout in Los Angeles was approved in March, adding to existing services in metro Phoenix and areas of San Francisco. Wuhan in China aims to become the world’s first driverless city, with 500 driverless taxis already in operation.

Intelligent personal assistants like Siri, Alexa, and Google Assistant, powered by generative AI, are also evolving. In May, both Google and OpenAI demonstrated significant advancements. Google’s AI assistant Astra can respond to voice commands based on what it sees through a phone camera or smart glasses. OpenAI’s new AI model, GPT-40, can perform live voice translation. Leading players are rushing to bring their AI agents to market, with Apple designing chips to enable large language models to run on phones.

Implications for banks

The bottom line is that capabilities are rapidly advancing. If history is any guide, consumers will soon have immense capabilities in their hands. So, how will banks adapt?

In our example above, banks would need to react quickly to inbound mortgage application requests at scale, similar to today’s e-commerce providers. They must balance speed and risk, ensuring they don’t slow down the process too much or approve unsustainable loans. The need for speed will only increase in a dynamic market.

When an AI assistant negotiates a tailored mortgage product, banks must support instant product creation and mass customization. They need seamless integration with ecosystem partners to turn provisional approvals into final approvals rapidly. This involves confirming the applicant’s identity, checking legal aspects, and orchestrating the ecosystem of lawyers, real estate agents, and regulators. They need to do it on a vast scale, knowing that most applications won’t complete. In effect, they need to become more like today’s e-commerce providers – operating lightning fast, at unbelievable scale, while recognising and working to reduce ‘abandoned cart’ situations. While working through their own processes, procedures and I.T. systems, they also have to balance the speed / risk ratio. Too much focus on risk mitigation will slow the process down – perhaps slower than competitors, resulting in all the work (cost) without the corresponding benefits (revenue). Conversely, if they focus on being the “fastest approver” it might result in unsustainable delinquency rates.

Navigating uncertainty / The future’s not set

In an era of rapid technological change, predicting the future is inherently challenging. The banking sector must acknowledge this uncertainty and be prepared to pivot quickly. Agility and nimbleness are crucial. Banks need to foster a culture that embraces change and is willing to adapt strategies as new information, technologies and trends emerge. This flexibility will enable them to stay competitive and responsive to customer needs in an unpredictable landscape.

Change is good?

While technological advancements bring numerous opportunities, they also come with potential downsides. Change isn’t always positive, and banks must be prepared to address the negative consequences as well. For instance, increased automation might lead to job displacement, and rapid digitalization could expose banks to new cybersecurity threats. Additionally, the fast pace of change can result in regulatory challenges and increased operational risks. Banks need to develop robust risk management strategies and ensure they have the resilience to adapt to both the positive and negative impacts of technological change.

Technology to augment experience

At the heart of these advancements, it’s crucial to remember that technology is merely a tool in service of people. The ultimate goal is to enhance human experiences, improve customer satisfaction, and create more meaningful interactions. Banks must leverage technology to better serve their customers, making banking more accessible, efficient, and personalized. This human-centric approach ensures that technological progress translates into real-world benefits for individuals and communities.

Conclusion

Is this story just sci-fi? Absolutely not. The technologies needed to bring this vision to life are already here, waiting to be harnessed. When Apple launched the first iPhone in 2007, they didn’t invent new technologies; they innovatively combined existing ones to create a groundbreaking product. The same opportunity exists today in banking.

The question is, who will be the visionary to reimagine banking for the future? Banks that embrace these advancements and integrate them seamlessly into their operations will not only keep pace with change but lead the industry into a new era of customer-centric innovation. The future of banking is not a distant dream—it’s an imminent reality. The time to act is now. Is your bank be ready to meet the challenge and seize the opportunity?