Synechron, a global financial services consulting and technology services provider, has today revealed the top trends it expects to see in financial services technology in 2018. These priorities touch on six key themes - Innovation, User Experience (UX) Design, Risk, Regulatory Technology (RegTech), Data, and the Cloud - that cut horizontally across the business and therefore are driving enterprise financial services decision-making. 

Based on Synechron’s work with the world’s largest global tier one investment banks and insurance companies, the company has identified the following top priorities for 2018.

Innovation - will focus on taking proven new technologies from pilot to production 

Blockchain and Artificial Intelligence (AI) will continue to dominate in 2018. Where last year was focused on blockchain-pilots, 2018 will be focused on production. As a result, there will be a stronger emphasis on the architecture and interoperability needed to support this approach. 

For AI, development will move away from simple automation and focus on cognitive use cases across sales, trading, wealth management and compliance. Cognitive RPA will be a critical bridge in moving from advanced robotics to real cognitive learning.  

User Experience Design (UX) - will increase in importance for new B2C and B2B proto-types

In 2018, firms can expect to see experience design applied to immersive technologies such as Augmented Reality (AR) and Virtual Reality (VR), with the aim to improve customer experience. Combined with Natural Language Processing and Machine learning, best practices for UX development will be re-defined for both external customers and internal employees, leveraging the immersive nature of the technologies to create new, meaningful experiences and gamified processes especially in areas like account onboarding. 

Risk – will focus more on real-time analytics and automation

Whereas 2017 focused on implementing new regulations focused on risk like Basel III, 2018 will shift to more enterprise-wide risk management techniques. To match the increasingly fast-paced environment of financial services, firms will need to improve real-time risk analysis, supported by AI, to fulfil the changing needs of the organization.

RegTech – will expand beyond KYC-centric use cases which largely dominate the space to take a tech-first approach to all new regulations 

With major regulatory changes on the horizon in 2018, RegTech will have a vital role to play as firms move beyond initial MiFID II compliance to gain more long-term benefits from the regulation and take a tech-first approach to their compliance with newer regulations like Fundamental Review of Trading Book (FRTB) and Consolidated Audit Trail (CAT) compliance. Tech-first regulatory compliance will lay the foundation for greater economies of scale across data, analytics, and related risk.

Data – will get “bigger” as big data initiatives push more intelligent and more open business models and better data tools and visualizations. 

While preparations for data standardization began in 2017, firms are still relying on legacy data architecture and infrastructure, and moving past these systems will be a main focus on data in 2018.

To comply with new data requirements like General Data Protection Regulation (GDPR) and Payment Services Directive (PSD) II, new data infrastructure will be required. Data virtualization, data lineage, and data visualization will also become increasingly important to gain additional value and intelligence from data.

Cloud – will begin to be considered for mission critical infrastructure

In 2017, banks began to move non-mission critical applications into the cloud, and in 2018 cloud adoption will be more widespread with a focus on security and regulatory compliance. Trends like the use of Open APIs will further drive adoption of the cloud for consumer applications in 2018, and place pressure on banks to create more open, cloud-enabled business models and applications. 

“2018 will continue to be an exciting and dynamic time for financial services. We expect that this year will see the culmination of some key technologies that aim to provide more effective methods of doing business, whether that is more intelligent AI, a more comprehensive use of blockchain or even business compliance ahead of Brexit. We cannot wait to see what 2018 will bring and look forward to leading the way on all these fronts,” said Faisal Husain, Co-founder and CEO at Synechron.