In its recent 2018 Banking Industry Outlook report, Deloitte identified six key themes that are driving trends for financial institutions today:1
- Redefining what makes for a positive customer experience
- Managing a myriad of technology platforms
- Mitigating cyber risk
- Adjusting to competition from fintech (financial technology) companies
- Aligning business strategy with regulatory compliance
- Reimagining the workforce to incorporate automation
Among these, cyber risk may be the most challenging and distressing for both bank management and their customers. In 2016 alone, more than 60 percent of all security breaches occurred in the financial services industry. However, banks are taking these threats seriously, with more than 85 percent of all financial institutions indicating in a recent survey that they were increasing their cybersecurity budgets.2
One of the weapons financial institutions are using to battle cyber fraud is artificial intelligence (AI). AI is incorporating behavioral science, cybersecurity principles and past experience to notice — in real time — fraudulent transactions.3
One of the biggest issues at the forefront of the banking industry today is the pending rollback of some provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The 2,300-page legislation was passed in the wake of the 2008 financial crisis and was designed to decrease risks in the banking system.4
Presently, there is a bill in Congress designed to exempt dozens of banks from some of the constraints of Dodd-Frank. While the new legislation enjoys bipartisan support, there is ongoing debate as to what provisions should be included.5
1 Deloitte. 2018. “2018 Banking Industry Outlook.” https://www2.deloitte.com/us/en/pages/financial-services/articles/banking-industry-outlook.html. Accessed March 29, 2018.
2 Guarav Sharma. Disruptor Daily. Dec. 21, 2017. “Top 10 Cybersecurity Trends in Financial Services and FinTech.” https://www.disruptordaily.com/top-10-cybersecurity-trends-financial-services-fintech/. Accessed March 29, 2018.
4 Investopedia. “Dodd-Frank Wall Street Reform and Consumer Protection Act.” https://www.investopedia.com/terms/d/dodd-frank-financial-regulatory-reform-bill.asp. Accessed April 10, 2018.
5 Sylvan Lane. The Hill. March 25, 2018. “Frustration mounts as Dodd-Frank rollback stalls.” http://thehill.com/policy/finance/380027-frustration-mounts-as-dodd-frank-rollback-stalls. Accessed March 29, 2018.
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