According to Forbes, machine learning, blockchain, and omnichannel customer services are some of the most significant financial technologies that will be important in the finance industry. We also think that automation tools and changing the workforce in the finance industry will be important in determining the future of finance.
For finance executives, it is essential to have predictions regarding the future of finance to decide their investments. Hence, this article explains our 5 expectations about the future.
1. Finance teams will increase their automation platform adoption
Figure 2: Areas in finance that can be automated.
Finance leaders have been attempting to automate general accounting operations (see Figure 2) by automating steps like invoice processing. Automation will touch more finance processes and adopting an automation platform like workload automation can help finance teams increase the automation rate in their operations.
Beyond finance teams, business and IT leaders in financial services including banking and insurance are likely to look for platforms where they can consolidate their automation efforts and reduce shadow IT.
2. LLMs will be fine-tuned for use in finance
Financial services are one of the top five industries that benefit from chatbots. Some of the benefits that chatbots offer:
- Boost internal processes
- Reduce customer service costs
- Increase sales
- And improve customer satisfaction
We expect that financial firms will continue implementing chatbots in their financial services due to their wide range of applications.
- Insurance applications: Currently, in insurance, chatbots can be used in:
- Insurance policies management
- Claims processing automation
- Broker management
- Banking applications: In banking, chatbots can be used in:
- Lead generation and qualification
- Customer services
- Feedback collection
- Financial service applications: In finance, chatbots can be used in:
- Onboarding clients
- Sales
- Customer services
We anticipate improvements in chatbot technology to provide more human-like services given that the finance sector will be one of the key investors in the finance sector (see Figure 3).
Figure 3: North America Chatbot Market.
3. Powerful AI will facilitate financial automation
We expect that more powerful AI models will be implemented in the finance sector.
1. ML will be used in financial services
ML models can improve the quality and efficiency of financial services and increase their security. Hence, we expect machine learning models to be widely used in finance.
- Insurance applications: We anticipate that ML will enhance insurance:
- Banking applications: In banking, ML will be used in:
- Trade finance applications: In trade finance, ML will be used in:
- General finance applications: In the finance industry general, ML will be used in:
For data loss prevention in banking.
2. Synthetic data will be used in finance to train deep-learning models
- Currently, finding a large size of high-quality data can be challenging to train accurate deep learning models in finance.
- We expect that synthetic data technology will be more commonly used in finance to increase data size to increase deep learning model accuracy.
- Hence, we anticipate the use of deep learning to be more widespread in the finance industry.
3. Forecasting will be faster with deep learning models
As Deloitte indicates that the application of powerful machine learning technology operations efficiently can lead to near-real-time processing of data. Finance departments currently rely largely on data analytics for predicting such as market trends.
- Data analytics takes more time than machine learning technology to process data.
We expect that finance departments will more commonly use deep learning technology for forecasting.
With the use of deep learning models next to near-real-time data processing, we anticipate that finance companies will be able to have better, faster, and cheaper predictions such as demand forecasting.
4. Blockchain technology will be more commonly used in the finance
1. Currency transactions
Blockchain technology is one of the technologies that is currently accelerating the digitization of the finance industry. The technology offers
- Improved transparency
- Enhanced security
- Speed in money transfer
- Reduced transaction costs
In currency transfers. Hence, we expect that blockchain technology to be more widely used in financial transactions.
2. Smart contracts
Also, smart contracts are a new technology that has the potential to improve efficiency in the insurance industry in particular because they are:
- Cost-effective
- Secure
- And Accurate
They yield these benefits because they shorten the time in claims processing and reduce human error factors and the risk of fraudulent claims. Blockchain technology can verify the activation of smart contracts by relying on third parties and this can enhance the security of claims processing further.
3. Internet of Things
Internet of things (IoT) technology can be used by banks to provide personalized recommendations to their customers. Blockchain technology allows for monitoring assets in a more advanced way.
We anticipate that banks will increasingly use IoT technology to provide better services to their customers.
4. NFTs
The NFT market grew by about 21000% in 2021 and blockchain technology is used in the NFT trades. They can be used in trading fashion or gaming items, or music pieces.
Currently, the market Bitcoin & Stacks, Solana, and Ethereum & Polygon are leading blockchains in the market for NFT transactions. We expect that Bitcoin & Stacks will remain important financial assets for NFT trade because it provides high security.
Hence, we expect that NFT trade will remain as an important factor in finance with its secure trading.
5. Centralized cryptocurrencies
Central bank digital currencies (CBDC) are currently in the market. These currencies, unlike cryptocurrencies, are created by central banks and they go through a banking system.
We anticipate that central banks will further experiment on CBDCs and potentially some of them to adapt to digital currencies.
5. The employee skills will shift with the automation
McKinsey previously indicated the shift to technological skills set from physical and manual skills and basic cognitive skills in the future of the workforce (see Figure 4).
Figure 4: The expected shift in the workforce by 2030.
We foresee that the profile of the finance industry’s workforce will gravitate toward a more technologically oriented workforce. With automation tools automating transactional tasks such as revenue management and AI providing near-real-time forecasting with the data, finance companies will focus on hiring automation specialists and machine learning engineers.
Open Technology Solutions (OPS) can be an example of this workforce change. They were positioning 24/7 hour staff at their data centers for data distribution and other processes to the associated credit unions prior to using the WLA tool OpCon.
After the implementation of the WLA tool, OpCon did not require data center employees to troubleshoot problems or integrate data manually. Hence, their 24/7 hour staff at their data centers was reduced to a number of WLA specialists.
Hence, we anticipate that the number of future technologically skilled employees in the finance sector will continue to grow, while the number of employees who use physical or manual skills or basic cognitive skills will decrease.
To learn more about our expectations regarding the future of finance you can reach us:
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