The transformation of traditional banking
In recent years, the use of artificial intelligence (AI) for banking transactions has enabled a different kind of transformation for the otherwise-known traditional industry: faster data processing and trained AI bots for virtual assistance, to name just a few. This modernization has allowed businesses and consumers to see that these technologies have personalized and streamlined bank transactions and commercial.
With these changes, users benefit from combining digital experiences such as contactless payments, digital wallets and cards, and banking applications for QR payments. This has promoted the integration of the financial ecosystem and a hyper-personalization of the services received. For example, in Latin America, credit cards were the primary payment method in 2023 (with a 48% share). This share is slowly decreasing in favor of new alternative payment methods such as transfers, “buy-now-pay-later” payment schemes, and digital wallets. This allowed banks to significantly improve the customer experience by tailoring services to clients’ individual needs.
In this context of digital transformation, banks are striving to remain competitive by adopting these technologies and operating in the cloud to optimize operations and improve the customer experience. However, according to recent studies, the banking and financial industry still faces these challenges:
- Regulation: Countries need to implement rules and regulations to promote security and trust in digital banking. In some LatAm countries, legal mandates currently do not allow all client information to be sent to cloud servers.
- Cybersecurity: The protection of financial data is fundamental, as we have seen that the financial industry is a constant target of cyberattacks.
- Quality service and user experience: Customers demand a smooth user experience and high-quality of service across all platforms.
- Legacy systems: The migration of data from legacy systems to digital platforms or more advanced technologies requires greater capacity in data centers. In addition, these almost-outdated systems and infrastructure must also improve energy consumption.
- Critical digital infrastructure: Advancement of digitalization and adoption of high capacity computing, including AI, requires power and cooling infrastructure that can support modern digital applications. Retrofit and new build sites need efficient, scalable, and flexible solutions.
To support advances in the banking industry, organizations must have uninterruptible power and efficient cooling, both of which are critical to maintaining continuous service as they directly impact the key areas mentioned earlier, such as cybersecurity, quality of service, and customer and user experience. By deploying a robust and efficient critical digital infrastructure, banks can integrate new technologies to enhance their ability to offer differentiated services and maintain a competitive advantage.
The transformation of traditional banking
The digital transformation of banking has been a necessary change that has not only made banks more agile and digital, but it has also diversified the services they offer customers. In a world where clients’ needs are changing, these advances are crucial. Neobanks, the blockchain, and fintech solutions are shaking the foundations of the industry with their customer-centric approach, challenging the status quo, and setting new expectations.
One of the most relevant new developments is the revolution that AI is bringing to the banking sector, especially through the use of AI application programming interfaces (APIs). Imagine customer service being handled by intelligent chatbots and virtual assistants that can solve complex problems quickly and efficiently. In addition, AI APIs can automate tedious and routine tasks such as data entry, which streamlines back-office management and improves operational efficiency.
But this transformation does not stop here. Embracing new technologies and innovative approaches is a must for any bank that wants to lead in this new era. At Vertiv, we have identified how banks that are ahead of the curve can improve their data center operational efficiency and be future-ready for AI innovations that can set new standards in customer experience. The integration of AI, blockchain, and fintech solutions, combined with a robust and secure critical digital infrastructure that includes power and cooling solutions that can support modern digital applications, can help to enable financial institutions to meet future challenges and capitalize on emerging opportunities.
Throughout this process, however, we must not forget the importance of enabling the continuity of services and the security of banking operations. This requires considering energy efficiency, implementing cooling systems that support AI and traditional loads, and using reliable UPS for power quality and continuity. To learn more about building a future-friendly critical digital infrastructure for banking, visit Vertiv.com.
