Forrester Predicts Shift In Financial Services Competition
Financial services will enter a new era by 2027, with AI driving competition and banks racing to adapt. This shift will change how banks operate and interact with customers.
Original reporting · forrester.com
Original: “Predictions 2027: Intelligent Finance Changes The Rules Of Competition”
Read “Predictions 2027: Intelligent Finance Changes The Rules Of Competition” at Forrester →
How this was written. Voyager Commercial wrote this article with a language model from Forrester’s reporting (model: @cf/meta/llama-3.3-70b-instruct-fp8-fast); it describes that reporting rather than adding to it. The original, linked above, is the full story.
Key points from Forrester’s report
- The financial services industry will undergo a significant transformation by 2027, driven by the increasing use of artificial intelligence.
- Banks will need to use their proprietary data and decisioning capabilities to provide personalized financial guidance to customers.
- The window of opportunity for banks to establish themselves as leaders in the use of AI is narrowing, and significant changes will be required to remain relevant.
By 2027, the financial services industry is expected to undergo a significant transformation, according to Forrester. This change will be driven by the increasing use of artificial intelligence, which will alter the way banks compete with each other. As a result, the focus of competition will move away from traditional products and channels and towards intelligence.
Forrester reported that many banks are currently working to launch AI-powered assistants to improve customer relationships. However, simply having an AI assistant will not be enough to stay competitive. Customers are looking for personalized financial guidance that can help them make informed decisions.
The use of AI in financial services is becoming more widespread, with many consumers already using conversational AI to get answers to their personal finance questions. This trend is expected to continue, with customers seeking more personalized insights and guidance from their banks. To meet this demand, banks will need to use their proprietary data and decisioning capabilities to provide better outcomes for their customers.
The window of opportunity for banks to establish themselves as leaders in the use of AI is narrowing, according to Forrester. To remain relevant, banks must be able to differentiate themselves through their use of intelligence, rather than just relying on traditional products and services. This will require significant changes to their operating models and the way they interact with customers.
Forrester predicts that some banks will announce plans to transform their operations using AI, but few will be successful in achieving this goal. To truly become AI-native, banks will need to fundamentally change the way they operate, rather than just adding AI-powered tools to their existing systems. This will require significant investment in new technologies and processes.
The battle to control the intelligent finance stack is already underway, with technology providers competing to become the central orchestration layer. This is driving consolidation in the market, with buyers seeking to acquire platforms that can coordinate customer intent, policy controls, and transaction execution. As a result, the pace of mergers and acquisitions in the AI banking technology sector is expected to increase.
Forrester clients can access the full report on Predictions 2027 to learn more about the trends and implications for the financial services industry. The report provides insights and practical recommendations for banks and other financial services firms looking to stay ahead of the curve in the use of AI.
Questions and answers
What is driving the transformation of the financial services industry?
The increasing use of artificial intelligence is driving the transformation of the financial services industry, according to Forrester.
What do customers expect from their banks in terms of AI-powered services?
Customers are looking for personalized financial guidance that can help them make informed decisions, and they expect banks to use their proprietary data and decisioning capabilities to provide this guidance.
What will happen to banks that fail to adapt to the changing landscape?
Banks that fail to adapt to the changing landscape and establish themselves as leaders in the use of AI risk being left behind and becoming providers of commoditized financial products, according to Forrester.
