Few industries are subject to as much continuous change as financial services. Increasingly sophisticated cyberattacks, higher-than-ever customer expectations and an ever-evolving tech scene mean organisations must constantly adapt to remain competitive.
What trends should you focus on in 2023 to stay ahead of the curve?
Here are 3 to prioritise.
1. AI-driven security to protect customers from fraud
Dramatic shifts in the digital economy have created a wealth of opportunities for cybercriminals, in areas from smishing to credit card fraud. It’s therefore unsurprising that leading analytics firm GlobalData forecasts that global cybersecurity spending in retail banking alone will rise from $7.9 billion in 2019 to $9.8 billion by 2024.
2023 will see financial institutions collaborating closely with regulators and technology partners to protect customers. This will drive investment in AI-driven security tools that are easy to implement and accessible for a broad range of customers. These include solutions that authenticate messages – where customers can send a quick text to verify a message they receive is genuine, reducing risks that they fall victim to smishing attacks.
2. Automated customer journey analysis for Customer Duty compliance
The FCA’s new Consumer Duty regulation comes into force in April 2023, so preparation is high on the agenda for financial services organisations.
The Consumer Duty sets higher consumer protection standards and shifts the onus on firms to prove they’re doing everything possible to prevent harm. To be compliant, companies need to examine every process and communication to make sure they’re being clear, supportive and proactive.
Data analysis is at the heart of Consumer Duty compliance. As a result, in 2023, firms will have to invest in robust systems to automatically capture, visualise, report on and analyse data at every stage of the customer journey.
3. RegTech to streamline increasingly complex compliance
The emphasis on fraud prevention and the focus on Consumer Duty converge in the final key customer experience trend for 2023: RegTech.
RegTech is any technology that enhances regulatory and compliance processes. While it has a range of applications and use cases, it’s primarily used for monitoring and reporting – helping deliver more robust and consistent compliance at a lower cost.
And it’s increasingly on the radar for financial services organisations looking to harness automation to simplify compliance with customer-related requirements, from GDPR to PCI DSS. There are over 750 global regulators and an average of 200 alerts every day. Managing this manually is increasingly impractical. Last year, the industry amassed over $5 billion in fines for data and AML breaches – which isn’t sustainable.
Regulatory change management technology streamlines compliance processes by connecting, automating and tracking requirements from horizon scanning to execution. In 2023, adoption will broaden as changes continue outstripping the capacity organisations have to manage them manually.
What else is on the horizon for 2023?
Check out our free Predictions 2023 guide, which has more strategic areas to prioritise for next year.