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Celent Innovation & Insight Day 2024

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3 April 2024
Jamie Macgregor

AI: The Race is On

The ascent of artificial intelligence over the last twelve months and the growth of embedded finance prompted Celent to ask, “What will it take to maintain a competitive advantage when technology adoption erodes traditional margins and barriers to entry?”

Just a year ago, we were addressing the massive hype around AI. Now financial institutions are embracing AI and generative AI, with the typical models pursued including:

  • Digital concierges, primarily for knowledge management, summarization and text analysis, content creation;
  • Productivity engineers, functioning as coding and testing co-pilots, and for operations optimization and synthetic data creation;
  • Decision co-pilots, for early warning signal identification, risk evaluation and advisory services, and prediction and option analysis; and
  • Protection officers, supporting cybersecurity threats protection initiatives, financial crime detection, and fraud (deep-fake) detection.

A lot of this will become table stakes fast. Financial institutions must evaluate their innovation practices, how to optimize the cost and pace of investments, and what they may need to do differently to stay ahead in the race to adopt AI and avoid slipping to become a laggard.

A quick recap on 2024's program

The status of the industry and what’s to come were illustrated in detail on March 21 during the Celent Innovation & Insight Day 2024. In our 18th year of our I&I events, we again recognized excellence in technology innovation across the world of financial services, capped with announcement of our Celent Model Award winners.

We also surveyed the audience to understand the collective mood regarding generative AI and its capabilities. Surveys evaluated:

  • What about the impact of Gen AI is keeping our industry awake at night (primarily concerns about being left behind, as reported by 56%, and uncertainty over regulation, reported by 53%),
  • The current use of Gen AI with client-facing initiatives (6% already use it for a key process, another 28% are using it in a pilot or proof of concept stage, and 34% aren’t yet using it for client-facing projects, but are using it internally), and
  • The anticipated impact of Gen AI on institutions in the coming five years (the largest group, 44%, believe it will drive step change of 21–50% improvement).

It may be tough to envision the business model changes that will be coming out of these technological developments, but AI definitely has legs. We’ll continue to monitor the advances needed for success, as use of AI moves from use for internal projects to client-facing initiatives.

Thank you to all who participated in Innovation & Insight Day 2024 to make it a success—our award nominees and winners (linked below), attendees, speakers, and Celent colleagues.

If you missed any part of our live event or want to revisit it, you can access all sessions—including plenary, fireside chat, Celent Model Award program overviews and award announcements, case study videos from award winners, and award winner in-depth reports (Celent client access only)—on-demand here.

Today’s Transformative Technologies

The initiatives that won the 2024 Celent Model Awards show how financial institutions are using transformative technology and AI. Some of the innovative approaches that were recognized include:

  • Demonstrations of the tangible impact of AI-enabled risk-mitigation to increase efficiency while significantly reducing risk exposures, such as by applying a customer journey-led approach that simplifies and automates the risk management process for all “change the bank” initiatives, in order to standardize and automate disjointed governance processes and questionnaires into a single seamless approval process with a unified data model across all these areas.
  • Ways in which insurers, reinsurers, and managing general agents (MGAs) produce outstanding business results from technology innovation initiatives, such as a life insurance company’s AI platform for claims that reads and interprets claims files and diagnosis reports to create a paperless, contactless, and secure information claims application process, which follows the international trends in Green Finance 2.0 and environmental, social, and governance (ESG).
  • The methods that retail and corporate banks are using to focus on “foundational change”—realigning and reorganizing people, processes, and technology to position themselves to better leverage many emerging technologies. Dynamic results shown by our award winners include more effective customer engagement, AI industrialization with strong data-driven strategy that focuses on maximizing value from data and analytics, and a small business-focused business management suite that combines and enterprise resource planning (ERP) platform with banking data and services to provide a single portal through which an entrepreneur can manage their company.

Towards a Perfect Future

Even as we collectively embrace new technologies such as AI, their impact is uncertain. But we, as individuals and on behalf of our companies, can work toward inventing the future. How? By imagining what a perfect future would look like, then evaluating the drivers and actions to help us get there.

This concept was illustrated by futurist and innovation advisor Chunka Mui, who joined us during our Kick-Off Plenary Session for an insightful fireside chat. Every industry, including financial services, has an immense strategic opportunity ahead of it, thanks to AI and large language models (LLMs). But the industry will also face challenges that aren’t yet fully clear. For example, as we embrace compute-heavy Gen AI, how do we evaluate the impact on climate change while aligning market incentives with societal priorities?

Don’t swing from complacency to panic, Chunka advised. Instead, and as he explores in his book A Brief History of a Perfect Future (available as a free download for I&I Day registrants and attendees), evaluate the slice of the future that you really care about, individually or professionally. Ask, “What would be ridiculous not to have in 10 years’ time?” Use the answer to write your future history and work back to it.

Each financial institution exploring these new technologies should take a rigorous scientific approach, starting small, iterating, and taking the time to apply new technologies to the specific problems and goals that the organization has the opportunity to address. This was great advice for FIs, which can use this guiding principle to ensure that their technology investments and implementations are aligned with the perfect futures they’ve defined.

Congratulations! Celent’s 2024 Model Award Winners

What would it look like for a firm to do everything right with today’s technology?

This is the primary question that Celent’s annual Model Awards seek to answer, supported by additional considerations such as “What are some best practices and measurable business results of technology project?” to illustrate what other financial institutions can learn from these initiatives. Award winners demonstrate practical and innovative approaches for maximizing value in an increasingly complex technology ecosystem.

This awards program recognizes excellence in technology in the financial services industry. Our 2024 winners illustrate the great developments of the past year. This year we’re celebrating 51 initiatives, selected from 250 submissions from 162 financial institutions and 45 countries. The program provides great insight to local market challenges and demonstrates how technology is being applied to some of the biggest opportunities and challenges across our industry.

Access award winner case studies videos and reports in each category through the links below. Celent subscribers are able to access in-depth case study reports, as well.

What innovative technology initiative is your financial institution implementing? We want to hear about it! Please consider submitting your project for Celent’s 2025 Model Awards program, which will open on November 4, 2024, and run through March 2025, with winners to be announced in summer 2025.

Let’s keep the conversation going.

It was wonderful to engage with participants in this year’s Celent Innovation & Insight Day. To continue the chat, please get in touch. To set up a meeting with one of Celent’s analysts, please message us or connect with us on X (@Celent_Research) or LinkedIn.