Finastra: Global FIs prioritise investment in AI, Open Finance

Ellie Duncan
27 Nov 2023

A global survey of financial institutions found that the vast majority (85%) perceive Open Finance as having a positive impact on the industry, while an increasing number are deploying AI or exploring its capabilities.

The Finastra ‘Financial Services: State of the Nation Survey 2023’ revealed that 87% of respondents in financial institutions and banks across the US, UK, France, Germany, Hong Kong, Singapore, Saudi Arabia, Vietnam and the UAE are “personally excited” about the pace of change in the industry.

The majority of financial institutions, at 85%, reported that at least a quarter of their customers are using Open Banking-powered services, while 46% revealed that more than half their customers are using them.

The survey also revealed growing interest in and use of AI, with 37% of respondents stating that their financial institution had improved or deployed AI technology in the past 12 months, up from 30% in 2022.

Of the 956 decision-makers surveyed, 83% said their institution is interested in the technology, with 26% having already incorporated generative AI in some form, and only 6% said that their financial institution is not interested in adopting the technology.

The latest edition of the survey also examined how banks and financial institutions intend to use AI, with many considering it a means to meet increased customer expectations for personalised services – 32% of those interested in the technology said they will use it in this way.

It found that the most common use case for generative AI is collecting, processing, and analysing data for ESG criteria classifications and decision-making.

Also in evidence was increased uptake of Banking-as-a-Service (BaaS), as Finastra reported that 48% of financial institutions surveyed have either deployed BaaS or improved their capabilities in this area in the past year, up from 35% in 2022.

“Despite the challenging economic climate, it’s clear from our research that investment in AI, BaaS, and embedded finance remain key priorities for financial services organisations over the next 12 months, particularly as they seek to further enhance and personalise the customer experience,” said Simon Paris, chief executive officer of Finastra.

“We share the industry’s ongoing commitment to ESG initiatives, to collaboration around Open Finance, and excitement in using advanced technologies like AI to help deliver on the opportunities ahead.”

In September, Finastra launched Compliance-as-a-Service on Microsoft Azure, a new payment solution that combines real-time sanctions screening and AI-powered anti-money laundering (AML) transaction monitoring.

Finastra’s Compliance-as-a-Service enables US and European banks to comply with instant payment infrastructures.