Recently VMware shared results of our recent survey of banking professionals that explores how technology will shape the future of the banking industry. One thing that is becoming abundantly clear to banking leaders is that technology, perhaps more than any other force, will drive the industry’s next wave of transformation. Consider how banking professionals answer a question about their institutions’ core mission. When asked to describe their business focus over the next year, the majority of survey respondents said it was “growing the bank’s profile and relationships in the communities it serves.” But over a three- and five-year horizon, the top business focus becomes “integrating digital and physical channels” and “becoming a digital leader,” respectively.

The question for financial institutions is no longer whether to invest in technology, but how fast they can invest. Our survey revealed that banks are already laying the groundwork for their digital transformation. Security upgrades, data center modernization and cloud computing deployments lead technology implementations currently as banks move to develop the systems and architecture needed for a rapid, ongoing transformation.  When it comes to cloud computing, 81 percent of respondents from banks with $100 billion of assets and 68 percent of respondents from banks with $15 billion to $100 billion of assets indicated that they are already implementing cloud computing technologies.

Further, the majority of professionals at banks with $100 billion or more in assets say their institutions plan to commercially implement nearly every major category of emerging technology, including APIs/open banking, artificial intelligence (AI), biometric authentications and blockchain. The future is not as far away as some may think. Consider that 67 percent of respondents from banks with $100 billion of assets or more are currently implementing blockchain technology.

When it comes to emerging technology, banking professionals expect its implementation to have a significantly positive impact on their business, particularly when it comes to personalizing customer engagement, strengthening security and improving efficiency. Transforming customer engagement is one of the top drivers of technology adoption and is where many banking professionals see AI playing a role in the not-so-distant future. In fact, 78% of respondents say that AI voice-based banking has the potential to be transformative in retail banking and about a third say AI voice-based banking could be transformative in commercial banking, too.

Regulatory and security requirements will continue to evolve and will require new technology – such as biometric authentication and blockchain – to meet these business imperatives. IT initiatives such as data center modernization and cloud computing programs will help banks become more nimble, agile and responsive to changing business needs and automate internal processes for better efficiencies.

The banking industry’s digital revolution will not unfold without challenges. Security and cost concerns top banks’ list of major obstacles to adopting new technology. Additionally, the complexities of integrating new technologies into existing platforms and upgrading legacy systems are seen as major implementation challenges. In fact, 46% of professionals say legacy infrastructure has some impact on their institutions’ ability to launch new products, and 42% say legacy infrastructure has a high impact. About half of bankers in the latter camp say their institutions are currently engaged in data center modernization and cloud computing projects to address the problem.

Banking leaders will partner with technology providers who can help their business become more efficient, agile and secure, and put them on the path to the future. And, VMware is here to help.

Free Whitepaper

To dive deeper into our survey results, you can download the whitepaper here. Additionally, to learn how VMware is working with financial services customers to modernize, mobilize, and secure financial services IT to drive top-line growth, visit www.vmware.com/solutions/industry/financial-services.html.