The Financial Times Live 2024 Global Banking Summit brought together thought leaders and innovators to discuss the status and future of banking, but one common theme that threaded almost all sessions is technology in banking. Among the standout voices was Piermont Bank Founder and CEO Wendy Cai-Lee, who spoke on two transformative topics: the opportunities and challenges of modernizing core banking technologies with AI, and the integration of technology to make banking more inclusive and sustainable.
Insights from the global banking leaders at the Summit provide important guidance for the banking industry to forge forward in the age of new technology and automation.
Progress focusing on risk management and regulatory compliance
At the Summit held in London in early December 2024, there was an obvious consensus among experts that AI technology in banking has made tremendous progress in revolutionizing risk management and regulatory compliance. From real-time monitoring, transaction monitoring (leveraging vast datasets to identify fraud patterns) and assessing credit risks to automating compliance processes and ensuring adherence to evolving regulations, a combination of predictive insights and operational efficiency helps banks proactively mitigate risks while reducing the cost and complexity of compliance operations.
Core banking modernization is more than just updating technology
The summit highlighted a pressing issue: the interlocking relationship between advanced automation technologies and legacy tech stacks. Many banks face difficulties as outdated systems struggle to integrate with modern automation tools, resulting in slow adoption, integration, and generating added operational cost. Cai-Lee emphasized the need to hollow the core by decoupling the core banking layers from legacy applications and allow the core to operate as a headless core while maintaining the business logic in the legacy to support the core. The goal? To ensure banks can effectively use automation to deliver the next generation of user experiences, both for customers and for the banking workforce.
She pointed to the need for omni-channel banking solutions, using automation to capture data from all touchpoints with customers, including in-branch visits, online, mobile, phone, and emails. The decision-making as a result of such integrated data analytics will allow the bank to improve the delivery of the banking products and support retention and acquisition of customers.
The path to inclusivity and sustainability
The banking industry also faces the challenge of aligning technological advancements with broader societal goals. Discussions at the summit underscored the importance of using technology to address inequalities in access to financial services while ensuring that sustainability remains at the forefront.
Cai-Lee acknowledged that technological advancement has the potential to empower small banks to have a broader reach and allow them to better serve the under-banked segments such as the minority and women-owned businesses. More importantly, it has the power bridge gaps and drive long-term value in streamlining operations and deploying advanced analytics for equitable lending. However, unlike Piermont, which is built as cloud-native and API-centric, most small banks that are burdened with legacy tech stacks have limited capacity (staffing and resources) to focus on modernizing the technology. Mapping out the sequence of use cases for automation is critical for those looking to implement automation tools. Such planning will allow for more effective deployment of investments and staff adoption.
A vision for transformation
Cai-Lee’s insights resonated with other global banking leaders: consolidate the lessons learned from existing automation and hollow and refresh core technologies to embrace the next era of banking. The integration of AI and innovative tools isn’t just about operational efficiency; it’s about reshaping the customer journey, enhancing risk management, and fostering resilience in a rapidly changing landscape.
As the summit concluded, one thing was evident: banks that embrace reinvention and prioritize technological synergy will lead the way in a customer-centric future.