Generative AI tops every list of major financial services trends for 2024. And it’s no wonder — this new technology has the potential to revolutionize the industry by augmenting the value of employee work, driving organizational efficiencies, providing personalized customer experiences, and uncovering new insights from vast amounts of data. Its predictive capabilities can help leaders anticipate market trends and make more informed decisions, improving financial outcomes for customers as well as institutions.
Since data is the underpinning of gen AI, understanding the latest data and AI trends and creating a strong data strategy are both key to leveraging the technology for a competitive advantage.
To learn more about how the financial services industry will use AI in 2024, we sat down with our in-house industry and technology experts. Here are just a few of their exciting predictions for the year ahead. For their full insights, read the new report, Financial Services Data + AI Predictions 2024.
1. Generative AI will be a make-or-break technology
Financial institutions that unravel the complexities of gen AI and can create proprietary gen AI models will see major competitive advantage and value creation as they transform customer experience, streamline operations and reduce waste. But for others, implementing gen AI will be complex, costly and insufficient in providing competitive differentiation.
The foundation for success is a data platform that allows flexible, cost-effective ways to access gen AI — whether organizations want to use off-the-shelf commercial and open-source large language models (LLMs), or fine-tune their own LLMs for more complex applications.
“In 2023, nothing captured the imagination of the financial services industry more than generative AI. While it will unlock enormous productivity and open up countless opportunities, organizations will also have to mitigate the risks of ungoverned usage to deliver successful outcomes. Unified data access, strong governance and robust security combined with technical expertise and a clear understanding of business objectives will be essential.”
Rinesh Patel, Snowflake’s Global Head of Financial Services
2. Specialized AIs integrated with data sharing will be a competitive differentiator
Financial institutions are seeking new revenue streams in light of ongoing economic volatility. One potential source is data sharing. Financial services companies have robust client and transaction data that can power gen AI-enabled insights — both within and outside their organization. The opportunities to reduce waste, streamline operations, reduce complexity and improve time-to-analytic insight through a data-sharing ecosystem will be significant.
However, sharing such data easily and securely has been a challenge with traditional data platforms. Financial services organizations need a modern data platform that allows them to anonymize data and share it without moving or copying it or risking the exposure of PII. Increasingly, financial institutions will monetize their data through apps and data marketplaces.
3. Mining unstructured data will be key to unlocking novel analytics
Companies that can harness unstructured data for gen AI-enabled insights will be able to open up new analytics use cases in every subsector — from banking and asset management to payments and insurance. The possibilities are endless.
But traditional data management systems struggle to store and process vast troves of unstructured data — ranging from emails and social media posts to scanned documents, video and audio recordings. A modern data platform with cloud-based storage and processing capabilities can scale to handle that data according to organizational needs.
“So much information about the customer is locked in unstructured data, such as call center transcripts, tax documents, application forms and social media posts,” says Patel. “By harnessing the power of unstructured data, organizations will be able to transform their customer 360 initiatives, accelerate customer onboarding and better enact ‘know your customer’ processes.”
4. Strong data security for gen AI will be a defining factor for growth
Data privacy and security concerns are top of mind among financial services leaders, and rightfully so. Gen AI is a double-edged sword in the realm of financial services cybersecurity. On one hand, it can boost security by detecting risks and providing immediate automated responses. On the other, it can introduce new vulnerabilities.
This is why organizations will increasingly focus on security and governance capabilities to realize the value of gen AI while mitigating the risks. Leading financial institutions will rely on strong data foundations that share, secure and govern data throughout the entire business ecosystem as they build gen AI solutions. They’ll prioritize data solutions that work across clouds. They’ll also prioritize platforms with built-in, highly observable and easy-to-use security capabilities.
To read all of our experts’ predictions for 2024, get the full report, Financial Services Data + AI Predictions 2024.