AI can provide value in customer service management, pricing and promotion and churn reduction.
Financial services industry outlook key takeaways
PE fund managers are looking beyond traditional financial engineering to keep investors satiated.
The insurance industry has shown improvement in workforce diversity, but gaps remain.
Financial services trend #1: CRE maturities' true exposure for financial institutions
CRE maturities true exposure for financial institutions
Here’s what commercial real estate maturities’ exposure looks like for financial institutions.
It has been over a year since the commercial real estate debt maturity scare ensued in the wake of several bank failures in March 2023. While CRE losses in 2023 were not nearly as dire as expected, concerns persist as nearly $650 billion of CRE debt is set to mature in 2024. Gross charge-offs for Federal Deposit Insurance Corp. banks increased 66% last year, compared to 2022; even so, CRE represents only 7% of that augmentation—a far cry from the expected crash haunting news headlines for months.
That data raises a question: If the industry was bracing for a crash within the CRE landscape in 2023, but actual CRE charge-offs showed only a modest uptick year over year and remained lower than average over the past decade, then what exposure to CRE deterioration truly exists in the United States, and how detrimental will it be to financial institutions?
Financial services trend #2: Insurers contend with cyberthreats & growing cyber insurance demand
In an era when digital threats grow more sophisticated by the day, understanding the landscape of cyberthreats and regulatory compliance has never been more critical for the insurance industry. With the scope and number of cybersecurity attacks increasing in recent years, insurers find themselves navigating how best to safeguard their own businesses while managing the growing demand for cyber insurance.
Insurers face increasing threats, underscored by a recent significant cyberattack that locked up systems and compromised sensitive data at a major U.S. insurer. The company reportedly paid a $40 million ransom to regain control of its systems in one of the largest known ransomware payouts to date.
Insurers contend with cyberthreats, growing cyber insurance demand
Insurance companies navigate cyberthreats alongside growing cyber insurance demand.
Financial services trend #3: AI in banking
Article
AI’s true value in banking
For banks, artificial intelligence holds significant opportunity in two areas: sales and marketing, and risk management.
ChatGPT's emergence has accelerated the adoption of AI in various industries, particularly banking, which is set to invest over $500 billion in AI tools. The technology's impact is most pronounced in sales, marketing, and risk management.
In risk management, AI is a game-changer, helping detect fraud and improving debt analytics for more accurate default predictions. However, successful AI deployment requires careful consideration of use cases, data availability, technology selection, and talent acquisition.
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