If predicting the future were easy, everyone would get rich in the stock market. In the absence of true clairvoyance, however, it’s still worthwhile to explore what 2014 will look like and where banks will make technology investments. What makes 2014 different is that many of the technologies will reach maturity, giving banks nearly limitless new opportunities.
Technology platforms will power both risk management and the customer experience
Banks will continue to focus on risk but not at the expense of investing in innovation and the customer experience. The good news for banks is that the same technology that can power risk and fraud management – high-performing databases and in-memory computing – can also be used to innovate on behalf of the customer. In 2014, banks will more fully invest in and leverage those platforms and capabilities. They will perfect their use of granular analytics and begin harnessing the power of predictive analytics, becoming much more customer-centric – without losing sight of risk.
Mobility achieves a tipping point
This will be the year corporate mobile and online banking fully comes into its own. Banks are devoting more and more resources to front-end innovation that touches the customer, and the corporate customer is demanding an omni-channel experience. Seamless banking “from anywhere” will achieve a tipping point, so as omni-channel banking continues to grow in the retail channel, look for it to take off in the commercial channel.
Payments space continues to sizzle
The payment space will remain hot. Banks will make substantial investments in technology for payments and other e-commerce services. There will be a rise in solutions that power seamless corporate-to-bank connectivity and enhance treasury services. The biggest trajectory, however, will be in the payments and offers space for retailers where it’s simply too valuable an opportunity not to exploit. To drive market share, banks will be looking to develop innovative offerings that set them apart not only from other banks but also their non-bank competitors.
Huge uptick in cloud
The biggest change in 2014 will be the huge increase in spending on cloud computing technology as banks become more comfortable with the practice. Some banks will go with a private cloud and build it out themselves. Others will replace aging legacy applications with cloud alternatives, run either in a secure private cloud or a public cloud, depending on the sensitivity of the data in the system. As the cloud grows, investments in legacy systems will shrink. Banks will be focused on reducing the costs associated with hardware, infrastructure, and other legacy technologies that consume resources but don’t drive innovation.
The banking revolution – harnessing technology to bring customers closer – is already at hand. As they invest resources in the coming year, bankers have the opportunity to help lead the revolution and embrace the future of banking.
Eric Stine is SVP and general manager of financial services for SAP