The banking and financial services industry (BFSI) is constantly evolving and adapting to new technologies in order to improve efficiency, security, and customer experience. In the next few years, we expect to see several major banking technology trends that will significantly impact the BFSI industry. In this blog, we will take a closer look at the top 4 BFSI technology trends likely to shape the BFSI industry in 2023.
What role does technology play in the BFSI industry?
The banking, financial services, and insurance (BFSI) industry plays a predominant role in the global economy. For a very long time, the industry has relied on a legacy model with limited digital capabilities. More than customer experience, for the BFSI industry, technological integration is required to enhance the security of their operations, employ the vast amount of data to drive meaningful insights, scale processes, and make remote banking an easy undertaking. Now is the time for financial firms to shift their focus to digital enhancements and innovation and thrive in the dynamic landscape.
The top 4 technology trends for the BFSI industry
With changing user expectations, inherent innovation demands, emerging trends, and substitutive business models, technology trends in 2023 for the BFSI industry will help financial firms in achieving digital sustainability and stay competitive and secure. The following are 4 BFSI technological trends that shape a productive future for the BFSI industry and how leading-edge platforms like Salesforce help accomplish these goals.
Trend #1: Blockchain and Distributed Ledger Technology (DLT)
Blockchain is a distributed, decentralized digital ledger that is becoming more and more popular in the BFSI sector. Blockchain technology is the perfect option for financial transactions since it enables many parties to share a single version of the truth. Blockchain technology is highly secure and impervious to hacking due to its distributed nature, making it an excellent choice for financial organizations wishing to increase security and transparency. DLT, a term often used interchangeably with blockchain, refers to a more general approach of distributed ledger technology, which can have different implementations other than blockchain, like Hashgraph and Tangle.
Smart contracts are among the most exciting uses of blockchain technology in the BFSI sector. Smart contracts are agreements that automatically carry out their conditions because they are put straight into lines of code. The efficiency of financial transactions can be considerably improved by programming these contracts to carry out automatically when specific circumstances are satisfied. In addition, blockchain can be utilized to develop new financial services and products, including digital assets, digital identities, and more.
How does Salesforce help?
World’s leading CRM platform, Salesforce in 2019 released its own blockchain platform, Salesforce Blockchain, leveraging Salesforce Lightning application builder and the open-source blockchain technology by Hyperledger Sawtooth. This low-code platform allows BFSI companies to build smart contracts, networks, and decentralized apps for sharing verified data via the distributed ledger technology (DLT). The best part, Salesforce Blockchain also employs artificial intelligence (AI) algorithms to automate processes.
As Salesforce is still improving on this platform, currently its main components include:
- Blockchain Builder: This helps developers and admins in creating decentralized apps, transparent to partners. It also features custom APIs for application setup.
- Blockchain Connect: This helps in distributing the Salesforce Blockchain apps safely and securely to clients with a read-and-write access.
- Consensus Mechanism: The protocols set up in this allows the network to decide which process fulfills the requirements.
- Hyperledger Sawtooth: This blockchain-based protocol is used for building the Salesforce Blockchain and ensuring the safety of smart contracts for the DLT solution.
- Smart Contract APIs: These APIs allow BFSI enterprises to add alternative business models. For developers, APIs allow developers to build and deploy business logic.
Trend #2: Low-code for accelerated application development
The BFSI industry is under constant pressure to deliver new products and services to customers quickly, and low-code and no-code platforms provide a solution to this challenge. Low-code and no-code platforms like Salesforce will continue to grow in popularity among BFSI companies as they enable faster development and deployment of applications without the need for extensive coding knowledge. These platforms provide a drag-and-drop interface that allows developers to create applications quickly and easily.
How does Salesforce help?
The current trend in development is leveraging low-code tools and platforms to build apps fast, optimize them as per the changing market trends, and reduce the workload on coders in terms of app development and launch. For the same, Salesforce has launched its low-code and pro-code capabilities that empower everyone in your organization to create and launch apps irrespective of their technical prowess. These innovative Salesforce low-code tools include:
- Einstein Data Detect: Privacy laws are a complicated affair, which is why this new tool from Salesforce makes it easy for you. Einstein Data Detect leverages artificial intelligence and machine learning to automate the discovery and protection of sensitive data and alerts organizations to take necessary measures around data privacy.
- Dynamic Interactions: This tool leverages the simple drag-and-drop feature to create interactive solutions. They include list, form, chart, and so on, built by developers and easily implemented by admins who then control its interaction with other components.
- Einstein Automate: When it comes to automating manual operations, the process can last for months. Einstein Automate reduces this number to days by employing leading-edge technologies like AI, data integration, and process workflows. This empowers businesses to automate complex tasks, go digital faster. Einstein Automate also brings together few other tools like:
- Flow Orchestrator to compose automation workflows
- Mulesoft Composer to automate integrations from internal and external data sources to Salesforce
- Pre-built solutions to streamline operations
- OmniStudio for other no-code tools
- DevOps Center: This tool from Salesforce acts as a central dashboard for tracking changes across the development and production lifecycle, enhancing collaboration via version control as a single source of truth, and managing governance. DevOps Center allows developers to launch apps faster, integrate them with systems, and migrate changes across sandbox environments without any custom coding.
Trend #3: Cloud Adoption
The BFSI industry is expected to continue its migration to the cloud, with Salesforce playing a key role in this transition. This will enable companies to reduce costs and improve scalability. Cloud-based platforms like Salesforce provide the flexibility and scalability that BFSI companies need to adapt to changing market conditions. They also provide the security and compliance that is required for the BFSI industry. With the cloud, BFSI companies can access their data and applications from anywhere and on any device.
How does Salesforce help?
Although Salesforce has a dedicated platform called Financial Services Cloud available, BFSI enterprises can also leverage multiple SFDC, Sales Cloud, Service Cloud, Marketing Cloud, and so on. However, to structure them for your BFSI firm, these clouds would require heavy customization, which is why it is advised to employ Salesforce Financial Cloud for all such needs.
Financial Services Cloud (Salesforce Financial Cloud) is inclined towards retail, B2C organizations like insurance companies, banks, mortgage brokers, etc. Like other clouds, Salesforce Financial Cloud helps connect disparate data sources together across departments to deliver consistent user experiences. For its immense benefits, Salesforce Financial Cloud is currently leveraged by capital market, wealth & asset management, insurance companies, and banking & lending.
- FSC household data model allows financial advisors to manage their user’s household businesses and related persons in one place. Admins can employ person or individual data models to set up account-contact relationships (ACR), account-account relationships (AAR), and contact-contact relationships (CCR).
- Financial Services Cloud supports investment accounts, bank accounts, and insurance policies via pre-defined record types to keep track of a user’s investment and define roles of a member in a financial account.
- It includes referral components to help advisors in keeping a track of leads and referrals. The referrer information is easy-to-view as individual records.
- Actions Plans in Salesforce Financial Cloud allow you to automate repetitive tasks and fulfill deadlines. You can auto-assign tasks to team members and accomplish compliance protocols.
- Advisor Analytics lets you leverage reports and dashboards to empower financial advisors with data-driven insights to improve user experiences. There are several predefined reports available that you can customize as per your needs.
Trend #4: Big data analytics
There is no denying that BFSI enterprises generate huge amounts of data, most of which is not analyzed properly to derive data-driven insights. This is where big data analytics can help banking and financial services organizations, in optimizing performance, driving digitization, and making most of the incremental response modeling techniques. By implementing predictive modeling (to predict user behavior), risk analytics (to optimize and control risks to boost revenue), and segmentation (by using algorithms to segment customers and implement data-driven insights for better user experience), BFSI enterprises can help maximize return on investment and optimize customer targeting.
How does Salesforce help?
Salesforce provides you with a wide array of internal and external tools to assist with big data analytics. Enterprises can leverage Salesforce CRM, Einstein Analytics, and Tableau CRM to derive actionable insights, predict outcomes, and explore recommendations, all with AI-powered analytical tools.
- CRM-connected analytics: You can seamlessly integrate your CRM and other internal/external tools with Einstein Analytics to build a single source of truth for your data, right into Salesforce. From this single dashboard, you can review insights from both internal and third-party data, gain recommendations, and take the next steps for your business. Empowered by intelligent and predictive analytics, you can drive business productivity at scale, customized for your business and people.
- Augmented analytics: Leverage the power of artificial intelligence and machine learning to gain a holistic view of your customers and make smarter business decisions faster. AI-Augmented analytics in Salesforce helps you predict future outcomes, evaluate how your data changes with respect to other data points, and how it adapts over time, all while drilling into a single dashboard. Einstein Analytics features include data prep tools and model visualization and operationalization to derive predictive and prescriptive insights. The best part, you can take all these actions from your Salesforce CRM.
- Enterprise-ready analytics: Einstein Analytics business intelligence software solutions are built on top of world’s leading CRM platform, Salesforce, known for frequently releasing seamless and regular upgrades to ensure superior performance of their technology, top-notch security of data, and engaging user experiences.
- Cognitive analytics: Salesforce introduced the addition of sentiment analysis, intent, and object detection to its Einstein Analytics AI platform to automate insights and employ predictive modeling within its CRM.
- Einstein Sentiment assists with evaluating the level of customer satisfaction via textual analysis of emails and/or social media content.
- Einstein Intent helps in analyzing a user’s intent or queries to optimize current processes and improve experiences.
- Einstein Object Detection allows you to train your models to identify objects in an image along with dimensions.
Implement Salesforce CRM with a trusted partner for higher success
Undeniably, the dynamic potential of Salesforce for the BFSI industry is immense. You can implement a full-suite of Salesforce tools like SFDC, Sales Cloud, Service Cloud, Salesforce Financial Cloud, Einstein Analytics, and Tableau CRM to improve banking operations and deliver superior banking experiences. As a leading Salesforce Partner, we help you leverage the right internal and external Salesforce tools to drive productivity, implement analytics for actionable insights, and ensure the safety and security of user data.