ThoughtWorks

Technology trends that will dominate the BFSI sector in 2023

Technology has been at the forefront of growth in today’s digital economy for Banking, Financial Services, and Insurance vertical segments. The industry segment has consistently showcased how the end-consumer experience has improved across the board by leveraging technology-based solutions. Today’s macroeconomic conditions warrant some reprioritization in terms of technology spent. However, we believe technology-based transformation will continue to gather momentum in 2023.

Cloud adoption: The cloud is one of the key elements of digital transformation. In the post-pandemic era, cloud adoption picked up considerably, and it will continue to be a major focus area in 2023. There was some hesitancy at first considering the overall information sensitivity, but it is now fading with the secure environment that the cloud provides and organizations embracing the shared responsibility model. Cloud adoption not only reduces the on-premises footprint and the associated costs, but it also increases the pace of idea realization and go-to-market planning.

Payments: Real-time money transfer is the prevalent theme. Almost every country wants to accelerate in this direction. As digital experiences become more universal across various Banking, Financial Services and Insurance services, payments modernization will continue to dominate the 2023 landscape. Buy-now-pay-later (BNPL) will see a lot more fruition in 2023 in the same space.

Crypto and blockchain: Crypto scenario has become quite shaky recently. There has been a significant erosion of trust with the massive drop in bitcoin value and the bankruptcy of some small players. However, we feel that blockchain will gain some ground with some countries trying out CBDCs.

Digital banking: This area will continue to have momentum, partially because it is a must-have and because it also augurs well with the overall theme of cost cutting. As a result, digital core banking product companies and their implementors will have plenty of opportunities in 2023 and beyond.

Focus on frauds: With increased digital adoption comes frauds. The entire fraud monitoring life cycle, from monitoring to remediation, will see a significant focus from a technology perspective, with a heavy emphasis on Machine Learning models, etc.

Open integration and ancillary services: With wider usage of technology, Banking, Financial Services, and Insurance segments will see an increased adoption of Open Integration. That will in turn drive ancillary services on top of the core ones, and the end consumer will get to see a lot more feature sets. This will also help improve the penetration of embedded financing.

Technology will continue to play a crucial role as organizations look to accelerate their digital transformation journeys to address the needs of the growing tech-savvy customer base. The year 2023, therefore, will be about sustaining the momentum and future-proofing the business with relevant technologies.

— Jaideep Dhok, Senior VP & GM, Banking, Financial Services & Insurance, Persistent Systems.

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