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2018 FINTECH TRENDS


Seven fintech trends to watch for in 2018


While there is a fair amount of buzz about which fintech innovations are here to stay and which are likely to fade away as we draw the curtains on 2017, here is a peep into the year to come and what it may have in store for bank CIOs


V. Ramkumar


Senior Partner, Cedar Management Consulting International LLC


I


n the not-so-distant past, the discussions of a typical IT steering committee would constitute topics of core banking or back office systems, middleware deployments, disaster


recovery and business continuity planning, and possibly driving the ATM and Kiosk channels. There is a huge shift from traditional systems into digital banking platforms, API enablement, cyber security and cognitive analytics and robotic automation. As we move further into 2018, there are quite a few areas that banks around the globe are looking to drive with fintech collaboration. Here are the top seven fintech areas of innovations that we, at Cedar-IBS, believe are of immediate relevance that CIO’s should keep an eye on, and trends to watch for in 2018.


1. Productivity enhancement: Robotic Process Automation


The most sought-after innovation area, and also the one that is likely to make the maximum impact in the banking industry in 2018, is RPA. What can simply be defined as a ‘mimic’ of human actions, set by user defined rules enabling faster transaction times, much higher volumes and significantly reduced error- rate, RPA offers a huge push to drive productivity across banking operations. Gone are the days of mere offshoring for marginal cost reductions. ‘Digital labour’ is emerging to be the new name of the game, with an estimated 20% reduction in costs as opposed to that of an FTE. Consider this: 200 software robots are reportedly automating business processes across retail banking, agri-business, trade and forex, treasury and human resource management at ICICI Bank in India. As banks look to drive RPA based efficiency, the key success factor is in effectively automating processes, without changing or replacing the existing application infrastructure. ISG’s acquisition of Alsbridge and Pega’s take over of OpenSpan are indicative of consolidation in the supplier segment as well. With increasing pressures of reducing cost,


Robotic process automation remains a foremost priority area both in terms of adoption and expected impact.


2. Harnessing data: Cognitive Analytics


$9.7bn was reportedly spent on cognitive and artificial intelligence in the US in 2017 alone. This is not surprising, given that big data is now driving a much deeper volume and broader variety of data elements, and the harnessing of information live is key for providing a differentiated digital banking experience for the customer. Cognitive analytics allows for processing billions of data sources in real-time, detect key patterns and deliver actionable insights. The recent collaboration of BBVA with Fonetic, a voice and text management service provider for proactive monitoring of trading compliance using linguistic analysis is an example of this initiative.


While this is not necessarily an exclusive domain of fintech – an


7 Key Fintech Innovations | Maturity Matrix Evident


• Cloud enabled services


• Cyber Security Emerging Maturity of technology


• Robotic Process Automation


• Cognitive Analytics Evident


• Blockchain / Distributed ledger


• Open Banking / API Emerging


• Machine Learning & Artificial Intelligence


www.ibsintelligence.com | © IBS Intelligence 2017


Immediacy of Impact


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