Banks are reshaping business models, integrating new technologies, and prioritising sustainability to stay competitive. Emphasis on Banking as a Service, embedded finance, and cloud-native solutions is driving this evolution
What are your views on the current trends shaping the digital banking landscape?
We live in a time of rapid, multifaceted evolution, presenting business leaders with their greatest challenge: keeping pace with change to ensure their organisations remain relevant, undisrupted, and ahead of competitors. To simplify, I will say there are three pivotal shifts driving banks to accelerate their transformation. Firstly, banks are recomposing their business model elements. Beyond scaling successful models, leaders are prioritising new approaches such as Banking as a Service (BaaS) and Embedded Finance to ensure a larger role in evolving ecosystems.
In terms of customer engagement, banks are deeply integrating into the primary journeys of both retail and business customers, with hyper-personalisation remaining a focal point. Embracing a digital-first approach, banks are pushing the boundaries of automation and workforce augmentation while maintaining resilience. Secondly, banks are navigating a dual technological evolution where emerging technologies coexist with maturing ones. They are exploring pilots with technologies like Generative AI while scaling the adoption of established technologies like cloud computing and APIs. Establishing a future-ready architectural foundation is essential to harness the potential of these technologies fully.
Lastly, the emphasis on sustainability, security, and privacy is becoming more pronounced. Globally, regulatory environments are tightening, compelling banks to operate sustainably, exercise greater responsibility in data usage, and handle the ethical dimensions of technologies like AI with maturity. We can expect increased investments and innovative initiatives to adhere to these mandates.
Please shed some light on the future of banking, considering factors such as regulatory changes, customer expectations, and technological advancements.
In our research report, Innovation in Retail Banking, we surveyed senior bankers globally to validate perspectives on what banking will look like in 2030 and identify key investment areas for banks. For customer engagement, about 78% of executives believe that over half of banking transactions will be initiated through non-banking channels because of ongoing open banking initiatives. Consequently, banking leaders will intensify their customer engagement initiatives, embedding themselves more deeply into customers’ primary journeys.
Banks will push the boundaries of innovation to create new value and remain competitive in both financial and non-financial ecosystems, with a growing focus on embedded finance. An inspiring example is Goldman Sachs partnering with Apple to launch a tailored savings account in the US, which acquired over $10 billion in deposits within 3.5 months.
Similarly, 73% of executives believe that digital transformation will significantly lower the current cost-to-income ratios of incumbent institutions by the end of the decade. This will drive initiatives aimed at transforming operations to reduce costs and improve organisational effectiveness. The survey also highlighted that 81% of executives predict more than 75% of enterprise banking applications will move to the cloud by 2030. This points to an accelerated adoption of cloud-based banking, AI, and composable architecture. To achieve these comprehensive results, banks will need to build talented teams and foster a purpose-driven culture that embraces transformation as an ongoing journey, unlocking the true potential of their organisations.
In this context of industry evolution, how can Infosys Finacle help banks navigate these changes?
At Finacle, we see our purpose as being a catalyst for inspiring better banking. We have committed ourselves to achieving this by building industry-leading digital banking solutions and SaaS services that enable billions of people and millions of businesses to save, pay, borrow, and invest better. Central to our purpose are five promises aligned with the transformation focus areas of banks:
Technologies like Cloud, AI, and blockchain are continuing to reset the normal for banks. How is Infosys Finacle empowering banks to prepare for a world of constant technological change?
We are currently witnessing the rapid evolution and convergence of technologies such as AI, Cloud computing, APIs, Blockchain, IoT, and Mixed Reality. Each of these technologies has the potential to profoundly change industry dynamics, and when combined, their impact is even more significant. One of our key commitments is to provide cloud-native, composable solutions built on modern technology. This approach enables banks to unlock new possibilities with modern technologies and enhance the financial lives of their customers.
We have made significant investments in this area. For example, our entire solution suite is cloud-native and cloud-neutral. We have live sites across the globe on both private and public clouds, spanning multiple cloud platforms. We have established partnerships with major providers like AWS, Google, and Microsoft, as well as several regional cloud providers. To ensure our applications are scalable, resilient, and maintainable, we adhere to the 12-factor cloud native methodologies. Additionally, we are platinum members of the Cloud Native Computing Foundation (CNCF) and continuously adopt next-generation practices emerging from the forum.
To fully leverage the potential of AI, we have developed a data lake house solution in alignment with BIAN data models. Apart from enabling embedded insights and AI use cases, we have also introduced an AI platform that enables banks to compose, test, and evolve AI use cases by combining various algorithms and data sets. Addressing data privacy concerns, we have created a patent-pending model for generating and leveraging synthetic data for modelling. In the realm of blockchain, we have been pioneers.
As early as 2016, our clients were live in production on blockchain-based cross-border remittances. Since then, we have expanded our offerings to enable clients to automate trade and payment value streams using our blockchain solutions. The key to adopting modern technologies lies in the strength of your platform architecture. Embracing microservices-based composable, cloud-native, and open architectures provide us with the agility and flexibility required to unlock the value of modern technology for our clients and their end customers.
With the increasing adoption of cloud-native SaaS services, how does Infosys Finacle ensure security while enabling banks to innovate and transform?
The Finacle suite is carefully designed to assist banks in effectively addressing and mitigating modern security challenges, allowing them to concentrate on business innovation. Guided by a robust security governance framework, the platform offers a multi-layered security architecture. It strictly adheres to secure coding and testing principles throughout the software development lifecycle. It is fully compliant with global security standards, including ISO27001-27002, PCI-DSS/ PAPB, FFIEC, and COBIT, among others.
Banks can utilise a variety of access control mechanisms for authentication and the segregation of duties and entitlements for both internal users and customers. The platform supports various security mechanisms for APIs and interfaces, including channel authentication, certificates, JWT tokens, and OAuth standards. Moreover, the platform enables banks to implement critical preventive and detective controls, such as the four-eyes principle, exception authorisation matrix, and a robust audit framework.
For cloud deployments, the platform extends capabilities for identity and access management, host intrusion detection, vulnerability management, and SIEM-based event monitoring. Finacle also provides nuanced capabilities, such as the ability to build your encryption, secrets, tokenisation, and data privacy features, empowering banks to adopt security-by-design in their end-to-end operations. Additionally, Finacle clients can benefit from a wide range of cybersecurity services with pre integrated third-party and homegrown security products offered by the Infosys CyberNext platform.