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The Bank of Tomorrow – The Future of Technology in Financial Services

Scriptbaker is delighted to present The Bank of Tomorrow: The Future of Technology in Financial Services.

Technology innovation in the financial services industry has evolved over recent years and continues to accelerate rapidly. With the growing number of FinTech neobanks disrupting the industry, traditional banking providers must learn and adapt quickly at adopting the levels of innovation currently being demonstrated by these challenger banks.

From customer-centricity strategies and regulatory change management to provide exceptional digital experiences with advancements including the cloud, data, automation and AI (artificial intelligence), to name a few, providers must learn to adapt and harness these innovations to avoid being left behind by their competitors.


FSIs (financial services institutions) must also have the digital capabilities when implementing these new technologies such as readily available infrastructure, increased security, automated payments, quick responses, faster processing of applications and customised product and pricing models to compete.

It has become apparent that the pace of these technological advancements is the pioneering and the most disruptive force in the financial services industry today. A report by PWC Global CEO Survey found that 70 percent of business leaders in the financial services industry believe the speed of technology change was a concern.


A look into the future of the bank of tomorrow.

Imagine you are competing against a global, low-cost digital bank that provides a variety of products and services that customers can access via their wearable and make instant payments and transfers at any time. Customers will also have their own AI (artificial intelligence) designed ETF portfolio based on risk appetite and saving goals that offer zero-fee, cross-border payments. This bank not only boasts these incredible features, but it also has a low carbon footprint. It uses AI to limit and prevent fraud, hedges currency risk using cryptocurrencies, transparently manages regulatory compliance, and rapidly prototypes new products and services.

In this guide, we provide a look into the future of the bank of tomorrow and the technologies FSIs should be, if not already, looking to adopt and implement. We also discuss the impact and benefits of these technologies.




Customer Experience

The Bank of Tomorrow – The Future of Technology in Financial Services

Demands from customers have quickly evolved in recent years with expectations set by other industries; customers now demand a better and more personalised service that is seamless across all channels.

Particularly with the arrival of neobanks, traditional financial institutions are competing with FinTech start-ups for their share in several business transactions that were once owned solely by established banks. 

Customers would now prefer to invest in a brand that focuses on their individual needs and continually offers value beyond the initial purchase.

With this new landscape, neobanks now face the challenge of educating people about their services and building consumer trust. This has given rise to challenger banks strategising to provide exceptional customer experience (CX) to stay ahead in the financial services industry.

Turning an exceptional customer experience (CX) into a competitive advantage and a key differentiator is the FinTech companies' constant aim. This helps them create ecosystems and, ultimately, gain ground in their markets.

FinTech providers are establishing partnerships to provide more services and offerings to customers. As well as focusing on strategies such as transforming the customer journey, developing their talent base and placing innovation at its core, these methodologies are putting them ahead.


As customer expectations evolve and the FinTech sector races towards further disruption, we've listed four critical priorities on how you can provide exceptional customer service.

Invest in self-service tools: In the UK, over 66 percent of customers prefer a self-service portal. This saves resources and enables you to service more customers quicker and easier, resulting in improved customer satisfaction and customer loyalty, thus boosting your sales revenue.

Automation to streamline services and increase efficiencies: By implementing automation, finance organisations can ensure that processes are accurate and delivered to the right people at the right time, enabling a more stringent compliance process. Automation also reduces the risk of fraud and credit scams.

Provide omnichannel experiences: Providers must find new ways to interact and communicate with their customers, whether through desktop, tablets, mobile, chatbots or voice assistants. The provider must combine all channels to provide a seamless experience at every customer touchpoint. This enables customers to continue with what they were doing on one channel and pick up where they left off on another. This also helps better to understand your customers and their preferred communication methods.

Gather, listen, and action customer feedback: Use customer feedback to improve the customer journey to provide a better service continuously. You may not be able to action every request, but you should note the common suggestions and create a roadmap to implement any new changes. It's always worth letting your customers know that they are being listened to; their feedback is important, and your team will continually improve the service.

Financial service providers should make sure they meet customer needs through a balanced mix of digital and human interactions to win the race. Banking via online channels is no longer a luxury; it is a necessity. The use of personal technology devices has accelerated the pace of consumer expectations and, therefore, the demand for more agile and scalable technology solutions. 

The challenge lies in creating seamless user experiences where human contact in customer services is maintained whilst also delivering fast access to digital channels from any device at any location. Convenient, secure and adaptable platforms that adapt to individual needs are crucial for winning customer trust and business.


Data and Customer Intelligence

The Bank of Tomorrow – The Future of Technology in Financial Services | Scriptbaker

Mobile phones are an integral part of our day-to-day lives. With that, companies now have unprecedented access to continuous streams of customer data. From digital cookies that enable the creation of personalised customer experiences to analysing transactions and providing money budgeting tips, businesses of all sizes recognise the power of data.

Customers now expect their financial service providers to understand their lives and needs and tailor banking services to meet those evolving needs.

FinTech providers are exploring innovative big data applications to disrupt reputable financial institutions with a customer-first approach.

Complex algorithms can process, analyse, evaluate and filter massive amounts of data sets at speed to produce useful information about individual customers.

Emerging FinTechs are unleashing the power of data to analyse and predict customer intent and behaviour, creating sophisticated risk assessments and setting them apart from the larger, established financial institutions.

The speed of real-time live data provides FinTech providers with the swiftness to remain agile and adapt to an ever-changing marketplace. They can plan and execute aggressive strategies at speed, leaving the traditional banks behind.

This allows FinTech providers to leverage the data gathered and create new products and services that meet the ever-evolving needs of their customers.

These complex algorithms that process large data sets enable FinTech providers to make faster, smarter decisions and build individually personalised customer experiences. Rather than sticking with the typical traditional risk assessments, FinTech providers can utilise big data to understand their customers on an individual basis better.


Cloud Systems

The Bank of Tomorrow – The Future of Technology in Financial Services | Scriptbaker

Cloud computing is beginning to have a powerful impact in the financial services industry; it is a fast-growing trend with many providers adopting the change. It has brought numerous benefits to the sector, with some key advantages including:

  • Increased security: Encrypted data and zero trust verification have improved cloud security in recent years. Used alongside other methods such as internal mandatory employee education and control of access, cloud computing is no riskier than traditional IT security infrastructure systems.
  • Improved service: The need for self-service technology has continued to accelerate in recent years. Self-service applications hosted on cloud technology helps organisations deliver an improved service at rapid speed.
  • Scalability: The need for a highly scalable infrastructure is paramount in this digital age. As FSIs are often evolving platforms, they require infrastructure that can evolve with them. Cloud technology offers the ability to scale quickly and efficiently while saving on costly on-site infrastructure.
  • Innovation opportunities: Cloud computing is an agile technology; without this ability, some of the recent technology advancements in the financial services industry would not be possible.
  • Data management: For many FSIs, gathering and interpreting data is crucial. Data is a critical driver of many of the decisions FSIs make. From administering new applications identity verification processes to account management and analysis of spending habits, companies are using cloud technology to collect and securely store readily accessible large amounts of data. 


Cloud computing can bolster and modernise IT infrastructure to provide your company with these capabilities and enable you to become a successful disruptor in your sector.

Financial providers must create an API (Applications Programming Interface) plan to adopt these innovative technologies. Like online and mobile banking currently, almost all financial companies will provide external APIs in the future.

Regulators in the UK and Europe mandate access to customer data and accounts in specific circumstances.

For example, traditional banks rely heavily on payment APIs to facilitate eCommerce. The handling of payments and remittance messages has been standardised globally in the industry. These global standards will outline similar structures for individual messages, which promotes interoperability and helps developers determine API requirements.

APIs require financial organisations to think differently about implementation and strategy, as transactions may come from third parties. The data captured in a transaction may drive considerably different business models. 

New business models will result in new ways of working, from changes to the data models used and how information is collected from other sources to the types of support structures that need to be implemented.

The Bank of Tomorrow – The Future of Technology in Financial Services | Scriptbaker

McKinsey research shows that effective use of the cloud can increase the efficiency of migrated application development and maintenance by 38 per cent; raise infrastructure cost efficiency by 29 per cent; and reduce migrated applications' downtime by 57 per cent, thus lowering costs associated with technical violations by 26 per cent.


AI (Artificial Intelligence)

The Bank of Tomorrow – The Future of Technology in Financial Services | Scriptbaker

Financial service providers must find new ways to meet growing customer expectations and regulatory change management. Incorporating AI (artificial intelligence) into its services and products will give providers clever propositions and smooth servicing of their customers, integrating seamlessly in partner ecosystems.

AI technology features branches such as natural language processing (NLP). This enables computers to understand and classify human language. The goal of NLP is to build systems that can understand the text and automatically perform tasks such as translation, spell checking and grammatical errors or topic classification. It's an efficient tool to help providers keep up with compliance regulations and changes. It can quickly analyse documents extract detailed information such as client information, products, services and processes. 

Another increasingly popular branch of AI is ML (machine learning). This type of AI provides data-driven recommendations and decisions based solely on the data inputted. To do this, ML enables software applications to study algorithms and historical data to predict the outcomes through experience and by the use of information and data.

Banks and FinTech providers need to utilise and deploy these technologies to get ahead and stay ahead in a rapidly evolving industry.

Examples of the types of AI and its use cases being adopted across the financial services industry

Predictive analytics: AI analyses and interprets large amounts of customer and company data to make intelligent assumptions and provide insights. This can be used to analyse customer engagement, measure product usage and review revenue data. This use of AI improves customer satisfaction and loyalty, maximises customer value, and increases revenue.

Chatbots: AI chatbots provide constant interactivity 24/7. Providing they have a balance of human-like features and automation, they can benefit finance companies in many ways. Chatbots are becoming an essential tool for many sectors, from handling transactions, providing ongoing support, reducing errors and costs, and increasing satisfaction.

Efficient regulatory change management: By using the power of AI, financial service providers can automate the process of regulatory change management by harnessing features such as natural language processing (NLP) and intelligent process automation (IPA). These powerful tools help providers keep up with changes in compliance regulations through the ability to analyse large documents and extract information efficiently.

Fraud prevention and anti-money laundering: AI is growing increasingly popular to detect and combat fraud. It quickly monitors and interprets multiple data sets, such as transaction history. Combined with other structured data, it can easily identify anomalies that may indicate fraud, including money laundering, cyber-attacks, lending fraud and ATM hacks.


Payments at Scale

The Bank of Tomorrow – The Future of Technology in Financial Services | Scriptbaker

Payment processing is the next battleground on which enterprise and challenger banks compete. In 2020, the global real-time payment market was valued at $10.6 billion (USD) with compound annual growth (CAGR) of 33 per cent between 2021 – 2028.

As new and updated business models emerge in the advanced payments sector, traditional banks seek to utilise open banking and open finance to help digital transformation and adoption.

Success in scaling up payment processing will vary between banks, relying heavily on their system setups. Cloud-based payment processing is currently the only viable option. This is because the cloud is low cost and low risk and enables financial institutions to shape the level of flexibility required to remain competitive in an increasingly digitised, reactive space.

Innovation requires flexibility. Because of this, financial institutions must update their infrastructure to be more agile and responsive. They will need a highly scalable architecture that can adapt as requirements change, collect new data, and adopt new systems.

Consumers need access to real-time, instant payment capabilities and readily accessible information. The shift towards a digital economy will continue whether banks provide faster alternative payment options or not. PISPs (payment initiation service providers) provide alternative payment methods through a single API integration with open-banking. This can be used to offer value-added products and services to other sectors.

A report by PwC predicted that eight out of ten financial service institutions will have outsourced cloud and platform infrastructure. 


Blockchain and Distributed Ledger Technologies

The Bank of Tomorrow – The Future of Technology in Financial Services | Scriptbaker

Rapid innovation is essential for financial providers looking to stay ahead of their competitors in a fast-moving industry. A popular innovation adopted by many FinTech providers is Blockchain technology and distributed ledger technologies.

Blockchain is a type of technology that records and stores encrypted data blocks on a database accessible to users who have joined the blockchain network. It is a system of recording that makes it extremely difficult to alter or hack. When a user adds a new data record (block), a timestamp that cannot be changed. Each time a new transaction occurs on the blockchain, a data block is added with the record of that transaction is added to every participant's ledger.

Distributed ledger technology, or blockchain, is a decentralised virtual ledger that records transactions across P2P (peer-to-peer) networks. The network of computers worldwide running blockchain software can approve transactions by consensus, making it far more democratic than today's financial system infrastructure. Distributed ledger technologies have the potential to ensure faster, more secure, and more efficient transaction processing at lower costs for both financial markets participants and regulators.

FinTech providers who can offer a great cryptocurrency and blockchain experience stand to gain a competitive edge. This innovative technology services as a powerful advantage in an increasingly crowded financial marketplace.

The telephone took 76 years to be adopted by half of the US population. In comparison, the smartphone took under ten years. We are now witnessing blockchain technology shift from a notebook draft sketch to an established technology in a fraction of the time the internet took to be accepted as an everyday tool. Technology-driven change is so prevalent that no industry is immune.

The Bank of Tomorrow – The Future of Technology in Financial Services | Scriptbaker


Technology – Investing for the future

The Bank of Tomorrow – The Future of Technology in Financial Services | Scriptbaker

According to a report carried out by Celent, IT spending in the financial services industry exceeded $1 trillion (USD) on technology investments over the last four years enabling open-banking, cloud applications, application programming interface (API) and personalised digital user experiences.

While financial institutions view these investments as a critical priority to compete against challenger banks, update business models, and meet shifting customer expectations, justifying the funding to boards and management has historically been difficult.

The pandemic has dramatically impacted market conditions, forcing nearly all customer interactions and internal collaboration to operate online.


The two vital challenges facing financial institutions today is:

  • Striking a balance between the need to modernise legacy systems and infrastructure and short-term pressures, including profitability, market capitalisation and investment capacity
  • Competing with increasing competition from traditional banks and new, challenger banks

Technology was once difficult to justify; it is now essential for survival. The pace of change and the need to innovate requires a more practical evaluation of technology investments to limit draining financial resources during digital transformation projects.

Post-Covid-19, digital user engagement, risk management, and capital reallocation will be critical to growing and retaining customers. In addition to this, institutions are working to grow revenue while adjusting to the ever-changing regulations and increased levels of uncertainty around performance and profitability. They must re-evaluate how they invest in technology to improve business resilience and decrease cost inefficiencies.


Driving forces behind today's technology investments

Many financial service institutes are reprioritising strategic investments to cut costs, relieve pressure on legacy systems, maintain compliance and adapt to new security requirements.


We've listed four key drivers most likely to define technology investment agendas.

  • Costly legacy systems

Most FSIs suffer the burden of legacy systems and outdated applications that obstruct and prevent productivity gains. Due to the risks and complexity of updating core IT systems, many companies are fearful and persevere with the costly implications of sticking with legacy technology.

Almost 70 percent of IT budgets are left to simply run, leaving around 30 percent of the budget to improve and transform. Companies that prioritise retiring outdated systems can reallocate budgets to invest in innovation and its future.

FSIs can transform how data, products, and services are established by modernising legacy systems. New, cloud-based systems can remove data silos and analyse data in real-time, which can quicken processing and the speed of deployment of new features. Cloud technologies provide more resilience by reducing infrastructure and capital expenditures.

  • Maintaining regulatory requirements

The impact of Covid-19 on FSIs resulted in the need for collaboration with local governments on mortgage holidays, payment deferral requests and stimulus disbursements.

FSIs were already collecting data and logging behaviour patterns that requires revaluation of risk management and modelling, with credit risk a top factor in their agenda. Leading FSIs gather new trends and insights from this data as it can directly associate with a company's profitability.

Industry regulators will likely expect FSIs to measure risk more frequently, with ad-hoc and real-time reporting a possible future requirement. FSIs will have to upgrade existing risk platforms and create new processes to manage credit, liquidity and market risk.

  • New cybersecurity risks

Transitioning virtually overnight to remote working created additional cybersecurity vulnerabilities for FSIs. This quick shift from office to fully remote operations brought new risks around phishing, data theft, application validation and fraud in remote authentication.

FSIs will need to implement further defences by protecting against new forms of fraud and developing new ways to flag any data breaches to mitigate these risks. Over a third of FSIs have implemented changes to their IT infrastructure to enhance the security of employees who are working remotely.

  • Evolving customer expectations

The impact of the pandemic resulted in a sharp increase in online activities, enforcing fundamental change in how consumers interact with FSIs. In some European countries, cash transactions decreased by 50 percent, with payment providers announcing significant growth in contactless transactions. 

Mobile app usage has increased, enabling the customer to self-serve and instant access to customer support and other products and services. A seamless digital experience that is personalised and offers reporting tools has become a standard expectation. Because of this, FSIs are constantly evaluating the best systems, channels and features needed to effectively meet customer expectations and achieve a good return on investment (ROI).

These four key drivers highlight the importance of technology investment so that FSIs can remain profitable and competitive. To overcome this challenge, FSIs need to quickly and efficiently support technology investments to deliver the business of the future, faster.


Priorities for the bank of tomorrow:

  • Update core IT operating model and systems. Invest in core IT systems – SaaS
  • AI / Data intelligence - learn and predict customer needs
  • Prepare your architecture to connect to anything, anywhere
  • Blockchain technologies
  • Cybersecurity will remain a top priority



As innovation in the financial services sector continues to evolve, financial institutions must quickly adopt. To make the most of these opportunities, Scriptbaker recommends the following:

  • Focus on emerging blockchain technology
  • Consider partnerships and affiliate schemes with other financial organisations to expand the customer base
  • Implement AI for cost and time efficiency and to maintain data security
  • Invest in R&D (research and development) to test new products
  • Integrate features to strengthen business