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Over the next decade, the financial services industry will undergo massive transformation driven by emerging technologies. As McKinsey analysis shows, seven key technologies – artificial intelligence, blockchain, cloud computing, internet of things, open source software, no-code development and hyperautomation – will shape the future of fintech and redefine the competitive landscape.

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Artificial Intelligence to Unlock Massive Value

AI has the potential to generate up to $1 trillion in additional value for banking globally per year. To resist disruption, banks must adopt an AI-first mindset and apply the technology across operations.

Key AI applications in finance include:

  • Personalized products and services
  • Intelligent chatbots
  • Automated transactions
  • Alternative credit scoring
  • Fraud detection
  • Process automation

Banks are realizing algorithms are only as good as the data. To gain advantage, they must tap into underutilized customer behavior data from conventional operations, which can power new ecosystem financing models beyond traditional offerings.

The AI-First Bank

Leading institutions are transforming operations by deploying AI systemically across the business lifecycle. This yields greater automation, augments human decision-making with diagnostics, and improves agility.

AI-first banks will also adopt the speed of digital disruptors, rapidly releasing new features to meet shifting customer needs. And they will partner extensively with non-banks to provide integrated services across platforms.

Blockchain Disrupting Finance

Blockchain and distributed ledger technology (DLT) allows synchronized recording of transactions across networks of participants.

Emerging applications include:

  • Smart contracts for real-time settlement
  • Tokenization of assets
  • Decentralized finance (DeFi)
  • Digital currencies

DeFi has seen explosive growth, with total value locked surging 50X to over $2 trillion. Major players are also allocating more to digital assets, elevating blockchain’s potential to transform capital markets. Platforms like Immediate Evex Ai are emerging to facilitate blockchain trading and portfolio management.

DLT will underpin ecosystem financing models by enabling seamless data sharing. And innovations like cross-chain interoperability are emerging.

Cloud Computing Liberating Innovation

Cloud technology can generate over $1 trillion in EBITDA gains for top companies by 2030. It increases efficiency in application development, cuts infrastructure costs, and improves resilience.

Key cloud trends in finance:

  • Hybrid models combining private and public cloud
  • Edge computing for data-intensive apps
  • Cloud containerization driving platform innovation
  • AI-cloud integration for deep learning

For banks, cloud enables flexible access to IT resources at lower cost. It also spawns new open banking models and banking-as-a-service.

Cloud allows quick onboarding of agile capabilities for new ventures. And elastic computing facilitates big data analytics. Microservices architecture will also transform core banking apps.

Internet of Things Building Trust

Once hype, IoT is coming of age with big implications for finance. It allows continuous machine interaction and data sharing.

Applications include:

  • Automated ESG monitoring
  • Usage-based insurance
  • Inventory financing
  • Embedded banking in wearables

For insurers, IoT enables personalized pricing based on usage data. It also allows superior customer engagement and accelerated underwriting.

In logistics finance, IoT tracks goods flows to enable new products like on-demand liquidity. And it brings trust to transactions through precise monitoring.

Open Source, SaaS, Serverless Lowering Barriers

For new fintech ventures, speed and scalability are critical. Open source software, SaaS and serverless architecture provide vital capabilities.

Open source provides free source code to accelerate programming. SaaS allows software use without ownership. Serverless removes the need to manage servers.

Together they enable low-cost, flexible infrastructure scaling and rapid prototyping. But banks must rethink IT strategies to leverage them, as organizational structures often inhibit agility.

No-Code Democratizing Development

No-code platforms allow apps to be built via graphical interfaces instead of programming. This reduces reliance on scarce software talent.

For banks, no-code speeds delivery of compliance tools and adaptations to market shifts. It also liberates resources for multiple innovations in parallel.

Leading cloud providers have invested heavily in no-code, underscored by Google’s acquisitions of Unqork and AppSheet. Expect deeper penetration across finance.

Hyperautomation Replacing Manual Work

Hyperautomation utilizes AI, RPA, and other tools to optimize decisions and automate work.

RPA deploys software bots to handle workflows, standardizing execution. It streamlines operations in:

  • Accounting reconciliation
  • Claims processing
  • Regulatory reporting
  • Treasury management

With deeper AI integration, RPA will handle more complex tasks. This will permeate finance, allowing faster responses to change.

The Future is Now

These technologies are synergizing rapidly, accelerating innovation across fintech. Agile players are harnessing them to generate value and reshape competition.

To stay ahead, incumbent institutions must leverage their scale and resources. The future will belong to those who embrace disruption. The time to act is now.