Current Landscape of Emerging Technologies

1. Application Programming Interfaces (APIs)

APIs have become a backbone for modern digital banking, enabling seamless integration and communication between different banking systems and third-party services. This technology allows for more flexible, scalable, and customizable banking experiences, enhancing service delivery and end user satisfaction. The report indicates that 79% of surveyed institutions have already deployed APIs, with an additional 14% planning to do so within the year.

2. Robotic Process Automation (RPA)

RPA technology is used to automate routine and repetitive tasks, significantly increasing efficiency and reducing the risk of human error. With the research reporting 70% of institutions having deployed RPA tools and another 21% planning to implement them soon, this technology is rapidly becoming integral to the operational ecosystem in financial services.

3. Machine Learning and Artificial Intelligence in Banking

Machine learning technology is pivotal in transforming data analytics in banking. It powers advanced predictive models and algorithms that enhance decision-making and risk management. The report notes that 42% of institutions have deployed machine learning, with expectations that this number will rise to more than half by the end of 2024 as more institutions recognize artificial intelligence in banking’s potential benefits.

4. Generative AI

Generative Artificial Intelligence (Gen AI), including technologies like ChatGPT and DALL-E, is gaining traction for its ability to create content, automate interactions, and personalize customer experiences. The report forecasts that over half of financial institutions will have incorporated Gen AI into their operations by the end of the next year.

Essential Technologies To Support Digital Banking Solutions

To remain competitive and responsive to account holder needs, financial institutions must also focus on technologies that have become essential to support digital banking and other retail banking solutions. The banking sector is experiencing a major shift thanks to technological advancements. Financial institutions are increasingly turning to digitalization, automation, data-driven insights and artificial intelligence in banking to improve account holder experiences, make their operations more efficient, and stay ahead in the competitive market. In addition to the emerging technologies discussed in The 2024 Digital Banking Performance Metrics Report, the below should also be noted:

1. Cybersecurity and Fraud Solutions

With the increase in digital transactions, cybersecurity is more critical than ever. Technologies that provide advanced encryption, fraud detection algorithms, and secure access management are essential to protect both the financial assets and the personal data of account holders.

Fraud remains a significant issue for financial institutions of all sizes, largely due to the growing complexity of deep learning technology. Impersonation scams are a prevalent form of fraud that these institutions face. As we move into 2024, it is becoming apparent that photos, videos, and audio can no longer be trusted at face value, especially with the vast amount of content online. This accessibility allows fraudsters to easily create avatars and use deepfake technology to mimic account holders. In response, financial institutions are expected to adopt passwordless authentication methods across their digital banking platforms, including mobile services, to enhance security and streamline the user experience.

2. Cloud Computing

Cloud technology offers banks the agility, scalability, and efficiency needed to manage vast amounts of data and sustain growing user demands. It supports a variety of banking functions from storage solutions to real-time data processing.  In addition to these benefits, cloud computing proves to be a security-first approach for a financial institution’s operations.

3. Blockchain Technology

Though still in its earlier stages of adoption compared to other technologies, blockchain holds significant promise for revolutionizing payment processing, enhancing transparency, and reducing fraud in banking operations.

4. Big Data and Analytics

Data analytics in banking help financial institutions utilize vast amounts of data for improved user insights, allowing for more personalized banking engagement on service offerings and strategic business moves based on real-time data analysis. Transaction enrichment is a process that allows for behavioral patterns to be extracted from account holder transaction data, provided the bank or credit union intel into each individualized financial journey.  These insights can then be used for financial services marketing campaigns, tailored messaging, competitive takeaways and other strategic business decisions to lay the groundwork for driving revenue growth and brand loyalty. 

Investing in Retail Banking Solutions

The integration of these technologies into digital banking strategies is not just about keeping up with trends, but about fundamentally transforming how financial institutions operate and deliver value to their account holders. As highlighted by the The 2024 Digital Banking Performance Metrics Report, the future of banking relies on a strategic approach to technology adoption, focusing not only on emerging technologies but also on those that are becoming indispensable in the digital era. 

As a level set for financial institutions, identifying digital maturity is crucial in navigating the technological advancements in banking, while building a strong digital foundation. Digital maturity not only indicates an organization’s capability to utilize and benefit from digital technologies, but also shows its readiness to embrace changes, innovate, and provide outstanding digital experiences.

The Alkami Digital Sales & Service Maturity Model Assessment, uniquely designed for financial institutions, is the first tool in the financial services sector that allows banks and credit unions to evaluate their level of digital maturity quickly and easily, while also providing next steps for a path forward. The tool is based on the Alkami Digital Sales & Service Maturity Model, developed from a recent research study of 215 U.S. financial institutions each with assets of at least $200 million.

By evaluating digital maturity, financial institutions can pinpoint areas needing enhancement, plan and invest more effectively, and implement the technologies that will support the overall digital strategy.