Technology trends for the financial services sector in 2024

The coming year is poised to be transformative for the Indian financial services sector, with cutting-edge technologies and policy changes redefining the industry landscape. Let's delve into the latest trends and anticipate their potential impact on the industry in India.

Digital dominance – in engagements, processes and payments: The continuous focus on digital payments in India is expected to drive the penetration of mobile wallets, UPI, and digital lending platforms. With digital payments expected to remain on a growth trajectory, they are projected to contribute considerably to the total transaction volume by 2024. We believe that in-person branch requests for cash withdrawal and deposits and usage of debit cards will decline, due to preference for online platforms and UPI. 

AI-driven hyper-personalization: Driven by the immense impact of AI on the Indian financial services sector, the most significant technology trend for 2024 will be hyper-personalization. AI-powered solutions will personalize investment portfolios, assess risk profiles for dynamic loan pricing, offer conversational financial guidance, leverage predictive analytics for proactive customer service, prevent fraud with individualized alerts, tailor insurance products, enable microfinance for the underbanked, create dynamic financial ecosystems, provide personalized financial education,  automate regulatory compliance processes, and empower employees by summerizing documents and workspaces and allowing conversational interaction with content.. This trend will revolutionize the Indian financial services sector in 2024, offering a more personalized, convenient, and accessible financial experience for all.

Rise of Open and Interoperable Data-Driven Financial Services: The National Financial Information Registry (NFIR) was introduced in India's Union Budget 2023-2024 by the Union Finance Minister Nirmala Sitharaman. It is a landmark initiative aimed at creating a centralized repository of financial and ancillary information.  This move comes in response to the growing need for transparency and efficiency within the Indian financial sector, addressing several key challenges such as limited access to financial data, lack of transparency and standardization and lack of comprehensive financial data, which makes it difficult to assess the creditworthiness of unbanked populations. Fuelled by the NFIR, 2024 will witness the rise of data-driven financial services built on open APIs and standardized data formats. This will unlock a paradigm shift in the Indian financial landscape, empowering lenders with comprehensive borrower data for informed decision-making, fostering collaboration and innovation, and enabling AI and advanced analytics to personalize financial offerings and drive deeper insights. As regulatory support for data sharing strengthens, the NFIR will unlock a data-driven, accessible, and efficient financial ecosystem for all.

Convergence of RegTech and AI for Hyper-Compliance: The proliferated use of AI is set to bring about substantial changes in the landscape of Regulatory Technology (RegTech). This amalgamation presents a robust answer to regulatory compliance, as it automates, validates, and streamlines processes, ensuring precision and minimizing both time and costs. In 2024, the Indian financial landscape will witness the convergence of RegTech and AI, leading to hyper-compliance. AI-powered solutions will analyze regulatory data, predict future changes, automate processes, identify risks, personalize compliance, and enhance transparency. Collaborative ecosystems will emerge, making compliance accessible for smaller institutions, while AI-powered oversight empowers regulators. This trend will revolutionize Indian finance, making it more efficient andtransparent,, paving the way for sustainable and inclusive financial growth.

The Cybersecurity Imperative in India's Flourishing Digital Financial Landscape: As India's financial services landscape undergoes rapid digitization, the cybersecurity threat landscape is evolving to exploit new vulnerabilities.   We can expect to see a rise in several key threats, demanding a proactive and multi-pronged approach from stakeholders. We believe that there will be a rapid proliferation in fake banking apps and phishing attacks. The growing popularity of mobile banking in India will make it a prime target for cyberattacks. We will increasingly see malware tailored to mobile devices that can intercept financial transactions, steal personal information, and even take control of user accounts. Cybercriminals will also actively target vulnerabilities in APIs to gain unauthorized access to sensitive data and financial systems.  The year will also see malicious actors will use deepfake technologies to create realistic audio and video recordings to impersonate authorized personnel and manipulate individuals into transferring funds or revealing confidential information.

Monica Hovsepian

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Monica Hovsepian is the head of worldwide Financial Services Industry (FSI) strategy at OpenText