Ahead of the Curve: Industry-Specific Technology Trends and Themes for 2024

What will the new year bring?

This annual question has a particular impact for the financial services industry as firms implement technologies to help them excel. With today’s rapidly evolving tech, Celent’s Technology Trends Previsory series provides a look at tech trends, themes, and best practices that will impact the industry in 2024.

A previsory—a portmanteau combining pre-view and ad-visory—delivers a view of financial services technology trends that Celent clients should have on their radar. The previsory series helps financial institutions make faster, more-informed technology decisions.

Here, I highlight some of the recurring themes that became clear through the eight live webinars (now available on-demand) and the accompanying reports. FIs must be aware of these trends in order to develop their strategic initiatives most effectively.

• Banking:
  • Corporate Banking: Faster, Safer, Smarter: The New Innovation Imperative
  • Retail Banking: Taking Agility to the Next Level with GenAI and Other Tools
• Capital Markets: Technology Table Stakes are Rising; Time to See Who’s in the Game
• Insurance:
  • Health Insurance: Health Insurance in a Post-Pandemic World
  • Life and Annuity Insurance: Digital Takes Over an Analog World
  • Property & Casualty Insurance: Mitigating Challenges with Smart Digital Strategy
• Risk: Battening Down the Hatches for the AI Tsunami
• Wealth Management: Envisioning a New Wealth Management Paradigm

“Now is the time to make a difference.”

As Karen Monks, a Principal Analyst in Celent’s North American insurance practice, put it: “Now is the time to make a difference.” This is broadly applicable across the financial services industry. Times are challenging—with geopolitical unrest, rising interest rates and inflation, the rapid onset of new tools like generative AI—but there will always be challenges.

Those firms that are struggling—whether due to previous lack of investment or due to an unwillingness to invest now—may be left behind. Data is the foundation of all technology; investing in it as part of a robust digital strategy can pay off.

How does your focus align with strategic priorities in financial services?

Across financial services, greater speed and agility are driving IT strategy. Common strategic focus areas—where FIs should pinpoint strategic initiatives and investments in order to maintain a competitive edge—include:

• Emerging technologies: Predictions and needs related to GenAI, as it moves into production, and the possibilities of quantum computing on the horizon were top topics across the board. Other areas of focus included central bank digital currency (for our corporate and retail banking teams) and distributed ledger technology (DLT) and digital assets (for our capital markets team).
• Customer experience (CX): Improving customer and client experiences and engagement is a clear focus area. Safeguarding value for customers, delivering enhanced experiences, optimizing the information that the FIs have about their customers, and meeting the needs of internal (e.g., brokers) and external (clients) users are among the varied considerations for improving CX. In banking, for example, “engagement banking” is gaining ground as a way of proactively engaging customers through personalized, omnichannel offerings—not just relying on self-service features. FIs “have the opportunity to … design the experiences that speak to what their customers really need, said Zil Bareisis, head of retail banking and payments.
• Regulatory changes: FIs must stay informed about and be able to respond to regulatory and compliance changes that impact their industry and geography. Regulatory change is rapid and some regulatory technologies still aren’t flexible enough to keep up.

A closer look industry-specific trends and priorities

Exactly what the strategic investments will be varies across the industries that Celent serves, while supporting themes identified above. Each previsory called attention to five business-driven technology trends, summarized in the chart below. Readers who are shaping the strategy at their organization may access the previsory webinars and download the reports to help guide their plans.

Data strategy

Cleaning up data. Improving risk data management architecture. Data hygiene. Data sourcing strategies. They said it multiple ways, but our analysts made the point clear: in order to transition from a “big data” era to an “AI era,” FIs must prioritize effective data strategy.

A Celent survey of 216 risk executives shows that improving data foundations is their biggest priority by far, with 47% responding that “improving risk data management, architecture and analytics” is their top priority. A centralized, cloud-based corpus of risk data is a prerequisite for increased usage of AI.

The best chance of successful implementation of GenAI initiatives is to have an effective approach to data management, in order to prevent “garbage in, garbage out” results. This process is a marathon, not a sprint, as Andrew Schwartz, an Analyst on Celent’s North American Property & Casualty team, highlighted. Relying on clean data is essential in order to yield clean results for the implementation of GenAI, quantum computing, process automation, data-fueled next-gen products, or new analytics initiatives. Whether driven by regulatory changes or the need to deliver enhanced customer experiences, effective outcomes rely on effective data strategy.

Access all 2024 edition previsory webinars and reports

To access the on-demand version of each 45-minute technology trends previsory webinar, visit https://www.celent.com/topics/technology-trends-previsory, where Celent clients may also download the accompanying reports.

Connect with Celent

We hope that this series of webinars and reports expands your horizons and sparks new ideas. To set up a meeting with one of Celent’s analysts, please message us.