Navigating the future of banking: Resiliency, innovation and technology

The future of banking is upon us, and in today's rapidly changing business landscape, the banking and capital market space faces numerous challenges. It is crucial for organisations to navigate the changing landscape with agility and foresight. On 28 May 2024, I had the privilege of hosting a closed-door event along with other PwC professionals and guest speakers, who are the industry leaders in this space. In this blog, we will delve into the key takeaways from the event and discuss the future of banking in an era of technological advancements and evolving customer expectations.

Operational resilience: Addressing cyber, supply chain, and people risks

One of the primary themes discussed during the event was the need for operational resilience. Due to the complex nature of financial systems, it is critical for organisations to establish robust and agile operational frameworks to effectively address the rapid changes in the business landscape. The session emphasised the need for an integrated approach that spans disciplines and functions as it is no longer sufficient for organisations to be siloes as they address today’s complex and interconnected risks.

It was also shared during the event that cyber, supply chain and people risks are top of mind and navigating different regulations across jurisdictions further adds to the complexity, making executive sponsorship essential for investment and prioritisation. Resilience programs are being developed to catch up with accelerated transformation, and a programme approach is required to uplift and sustain resilience efforts. This further highlights the need for organisations to rethink their design and operations for resilience.

Combating financial crimes: Integrating scam management

The ongoing evolution and increasing sophistication of financial crimes, particularly scams, pose significant challenges for the banking sector. The integration of scam management into overall financial crime efforts was emphasised. While anti-money laundering (AML) does not cost direct financial losses to banks, scams result in direct financial losses for both banks and individuals.

The experience with the COSMIC Platform has been positive, but the Shared Responsibility Framework in the UK has seen a negative impact, with the number of scams doubling. It was also discussed that non-banking players should actively participate in combating scams.

By leveraging synergies between scam prevention and anti-money laundering measures, organisations can better combat financial crimes and mitigate their potential impacts, safeguarding their customers' financial well-being. Collaboration between industry stakeholders and regulatory bodies was also highlighted as a crucial aspect of combating financial crimes effectively.

AI and its role in reshaping workforce

Artificial intelligence (AI) has emerged as a transformative force across various industries, including the banking sector. It is critical to ensure a balanced and socially responsible integration of AI into the workforce. The session shared intriguing debate surrounding the extent of productivity and its tangible effects on the audience. It also delved into the strategic approaches of leveraging specific use cases versus integrating Generative AI (GenAI) capabilities into the entire workforce.

Furthermore, the session also shed light on the importance of incorporating environmental, social, and governance (ESG) considerations, with a particular emphasis on the social aspect, when implementing AI technologies in the workforce. While AI can automate routine tasks and enhance operational efficiency, organisations must ensure that the technology is deployed ethically and transparently. With this, banks can leverage AI to streamline processes and personalise customer experiences to drive growth and innovation.

Read more about the AI’s impact on jobs, wages, skills, and productivity in our latest global publication, PwC’s 2024 AI Jobs Barometer.

The future of banking: Embracing technology and innovation

Technology and innovation play pivotal roles in reshaping the banking sector, with Gen AI democratising previously complex technologies and driving digital transformation. Open banking initiatives, along with collaborations between traditional banks and FinTechs, are accelerating innovation and enhancing customer solutions. Incumbent banks are exploring new technologies to address challenges like liquidity inefficiencies, while partnerships between new and existing technology providers are fostering innovation.

The emergence of GenAI on the other hand, also holds significant promise to deliver significant opportunities in the future of banking. And by embracing technology and innovation, organisations can stay ahead of the curve and meet evolving customer expectations. However, it is important to establish guardrails and ensure proper governance and resilience.

This session also featured a sharing session by Eugénie Krijnsen, our PwC’s Global Financial Services Advisory Leader. The sharing includes banks rethinking their right to win and to rethink their value chain amidst other industries, especially the tech sector entering the banking sector via embedded finance and "owning" customer journeys.

Culture and conduct in banking: Building trust, guiding decision-making and driving success

In an era of increased scrutiny and accountability, ethical behaviour and a positive organisational culture are instrumental in shaping decision making processes. The discussion highlighted the need for organisations to prioritise integrity and transparency. There were also discussions around the implementation of disciplinary actions to encourage ethical conduct and ensure alignment between organisational and individual values. Fostering trust and promoting core values within the organisation can help align individual behaviour with organisational goals and create a cohesive and ethical work environment, ultimately driving long-term success.