It’s a time of reflection and anticipation at The Fintech Times throughout December, as we look back at developments and trends over the last 12 months and forward to the year ahead.
We’re excited to share the thoughts of fintech CEOs and industry leaders from across the globe to 2023’s key takeaways and what we should expect to be top of the agenda in 2024.
Generative AI, a transformative force within the financial industry, takes centre stage today as experts from Finastra, Fujitsu, Workiva and Unqork provide their 2023 reflections and forward-looking perspectives and predictions for the future.
Finastra underscores its significance in financial software development, while Fujitsu highlights its role in ESG and data classification. Workiva sees it as a means to boost employee productivity, and Unqork envisions its potential in migrating legacy systems and fostering collaboration between business and technology.
‘Generative AI is not going anywhere’
As we approach 2024, the landscape of corporate reporting and compliance is undergoing a significant transformation. In this dynamic environment, generative AI is poised to take centre stage, according to global software-as-a-service company Workiva.
“Looking forward to 2024, it’s clear generative AI is going to make an impact – especially when it comes to corporate reporting and compliance,” says Steve Soter, vice president and industry principal at Workiva.
“Next year, we’ll begin to see reporting teams moving beyond experimentation to using generative AI to boost productivity in meaningful ways, such as drafting starter disclosures and performing data analyses. There’s also a near-term opportunity to leverage generative AI as a compliance check, focusing on how internal teams meet disclosure requirements, and even leveraged to perform audit tests and audit reporting.
“For these reasons, in relatively short-order, generative AI will become increasingly critical in boosting efficiency and enabling insights that lead to better and faster data-driven decisions. As the momentum of generative AI increases, so do the attendant risks and it will be paramount for organisations to ensure proper governance, controls, and human oversight of the nascent technology. One aspect which is clear, is that generative AI is not going anywhere and will play a crucial role in the technology sector in 2024.”
‘Solid progress in improving or deploying AI’
Soter’s insights into the growing role of generative AI find resonance in the observations of Simon Paris, CEO of fintech Finastra, particularly in the realm of ESG and data classification.
“While financial and other institutions have been buffered from the geopolitical and macroeconomic storms that continued throughout 2023, high levels of tech investment remain a priority for many. Within this trend, and for financial institutions’ 2024 outlook specifically, our recent Financial Services State of the Nation survey showed that investments into AI, BaaS, and embedded finance remain investment priorities over the next 12 months.
“AI is, unsurprisingly, high on the agenda, and we are seeing institutions make solid progress in improving or deploying AI, including ML, NLP or RPA. What is surprising, however, is the significant progress already made in generative AI; over a quarter of respondents claimed their institution had already incorporated it in some form and just 6% said their institution wasn’t interested in it. I’m personally excited to see that the most widely cited use case for gen AI was for ESG purposes, specifically data classification and supporting decision-making.
“Finally, and perhaps most interestingly of all given geopolitical and macro-economic context, our survey showed that financial institutions’ executives’ optimism is high; nearly nine in 10 decision-makers worldwide are excited about the opportunities presented by the pace of technological and cultural change within the sector. As we believe, it is only by combining a thoughtful leverage of technology and a continued cultural shift that we will see a widespread adoption of open finance, and all the potential socioeconomic and sustainability benefits that it can unlock.”
“A transformative solution’
Krista Griggs, head of banking, financial services and insurance at Fujitsu, also outlines AI’s transformative potential to enhance employee productivity and optimise operations, addressing the persistent challenges in the financial industry.
“When we look at generative AI, it is already embedded in ‘mainstream’ technology like Microsoft’s co-pilot, will be everywhere,” she says. “As global superpowers debate security, trust, and intellectual property, the adoption of these cutting-edge technologies will continue to surge.
“However, while mainstream banks have reported strong financial performance this year, much of this success can be attributed to interest rate delays for deposits and headwinds remain in the form of high customer acquisition and service costs.
“Generative AI offers a transformative solution—a step change in employee productivity. By automating routine tasks, financial institutions can redirect saved resources toward more strategic initiatives. The pressure to optimise operations has never been greater, and gen AI is the answer.”
‘Analyse IT systems’
While generative AI has emerged as a disruptive trend in 2023, Gary Hoberman, CEO/founder of codeless development platform Unqork, stresses the need to go beyond simply generating more code and instead leverage generative AI’s potential to analyse and migrate legacy IT systems.
“The one thing I am certain of is whichever technology or platform your IT team is creating financial software with today, it has a shelf life and will go ‘end-of-life,” he says. “Each new application created is just adding to the prior technical debt and legacy build-up weighing down what could be great financial institutions.
“In 2023, the most disruptive trend was undoubtedly generative AI. While it’s a fantastic tool, I absolutely do not recommend using it to generate code or build new applications. It can surely create code faster but that code will have the same shelf life so just creating more legacy faster is making companies worse off.
“In 2024, I believe that generative AI will increasingly be used to analyse legacy IT systems and help migrate them to future-proof options, reversing decades of technical debt. Specialised AI models can provide details on how an application’s purpose and functionality can be migrated to newer, legacy-free platforms, offering a more time- and cost-effective solution to modernisation.
“I also foresee the idea of ‘citizen developers’ morphing to a world where business and technology work together to create future-proof software on the same platform.