2023 Financial services industry outlooks

1. 2023 financial services industry outlooks The year 2023 will be difficult for financial institutions. Innovative new technologies are reshaping the sector, influencing the services that financial institutions provide, how they connect with customers, and how they apply new data sources across departments. However, the emergence of increased economic insecurity is placing entire markets in peril and threatens to heighten uncertainty for both lenders and borrowers. According to the Financial Services Market Research Companies, financial services will continue to evolve. Some of the important developments for financial institutions will be: ● The future of banking will be dominated by open banking ● Legacy systems will be replaced by cloud-native ones ● The importance of artificial intelligence (AI) and machine learning (ML) will grow ● Cybersecurity remains a high priority Balancing Digitization With Changing Risks And Long-Term Sustainability With physical banking and insurance services restricted, the pandemic accelerated the adoption of digital technologies, and incumbents responded by stepping up their technology transformation efforts to rejuvenate digital channels. Because digitalization is profoundly interwoven in the societal context, it is increasingly being analyzed through the lens of security, stability, and sustainability. Sustainability is progressively becoming a key performance indicator of the degree of digital transformation. To drive a purpose by incorporating ESG aspects, the BFSI sector has been emphasizing the adoption of ESG targets in its products, operational procedures, and corporate strategy.

2. Making a Difference in the Future of Regulated Markets According to the Financial Services Market Research Companies, the financial ecosystem is about to be transformed by decentralization fueled by digital assets and tokens. By 2023, I expect all major BFSI businesses will be investing in bridging the gaps between decentralized finance and traditional finance to unlock commercial value. We will see an increase in the adoption of new currencies and tokens in the regulated market as nine out of ten central banks experiment with central bank digital currencies (CBDCs). One of the primary drivers of digital asset adoption will be the ability to reduce settlement times through seamless 24/7 cross-border transactions and automatic FX currency conversion. Blockchain technology, for example, will support the change in financial market infrastructure. From Open Banking to Open Finance Regulators throughout the world have endorsed open banking ideas that could increase market competitiveness and benefit end users. Banks are driven to offer digital services,

3. fair pricing, and enhanced security as a result of the openness provided by open banking. The next step in the evolution of open banking is open finance. Beyond banking products and services, open finance could enable data sharing for new cross-industry business models. A good example is Bancassurance, which combines banking and insurance. Many open financial ecosystem alliances will arise in 2023, such as BFSI and automotive for the future of mobility, banks, and energy firms for sustainability, and sports and banks to finance the creator economy. Digitization, decentralization, and decarbonization will continue to be the top three innovation trends in 2023. While digitization will continue to improve efficiency, lower costs, and expand income streams by diversifying into new products and services, decentralization (specifically, enterprise decentralized finance) will create new business models in the capital markets arena. Decarbonization, in conjunction with aggressive net-zero targets, will remain a primary focus for the industry, having a significant impact on companies' strategic thinking and future investment decisions.