2024 banking trends and innovations: Insights from Sajit Vijayakumar, CEO of Infosys Finacle

Tell us more about yourself and your role at Infosys Finacle.

As the CEO of Infosys Finacle, I lead the business for the industry's leading digital banking solutions suite. With over 27 years of experience, I specialize in technology-driven business transformations, focusing on the intersection of technology, banking and customer value. I strive to empower teams to build and deliver modern solutions so that banks can engage, innovate, operate and transform better. Previously, as COO of Finacle, I oversaw product management and delivery teams. My career includes roles in consulting, global delivery and customer engagement across the US, UK and India, consistently leveraging technology for business growth. Today, banks in more than 100 countries rely on Finacle to help more than a billion people and millions of businesses to save, pay, borrow and invest better.

What do you see as the key trends in banking innovation and transformation this year?

Broadly speaking, I believe the industry will see significant transformations and innovations in response to three pivotal shifts in 2024 and beyond.

Firstly, there will be continued transformation and innovation across business model elements. Banks will focus their efforts on pushing the envelope by scaling new models, such as banking-as-a-service, embedded finance, and financial and non-financial marketplaces. Innovation in customer engagement will aim at integrating banking more seamlessly into the primary journeys of both individual and business customers, and at providing hyper-personalized experiences. Banking operations will leverage digital transformation for further automation, to build resilience and to augment the workforce.

The second trend that banks are dealing with is a dual progression of technology, where new technologies are emerging while existing technologies are maturing. So, on the one hand, banks will look to experiment with technologies like generative AI and web 3.0, and on the other, accelerate the adoption of ‘mainstream’ technologies like cloud and APIs. In both cases, having the right architectural foundation will be critical to unlock full potential.

Then there is the increasing focus on initiatives around sustainability, security and privacy. Worldwide, we are seeing stringent regulatory environments shaping the governance landscape, pushing banks to become more sustainable in their operations, more responsible in their use of data, and more cognizant of the ethical aspects of AI. We anticipate the industry will intensify investments and initiatives to innovatively comply with these mandates.

Infosys-Finacle and Qorus have also been conducting annual research into innovation in retail banking for over 10 years now. What are the challenges facing the heads of innovation and transformation?

I’d like to spotlight four challenges here and some of these have consistently figured in the research over the years. 

Firstly, maintaining and executing a clear vision on building competitive advantage and fostering collaboration with fintech, big tech and players from other industries poses a significant challenge for banks in today's evolving landscape.

Secondly, banks continue to grapple with legacy systems, and their inability to leverage data  and AI. In last year’s survey, 40% of respondents said they had made no progress, or even fallen behind, in their efforts to transform legacy core systems, while 25% said this about their (digital transformation) efforts to improve the use of data, analytics and AI. They must quickly resolve these issues if they are to unlock new opportunities, for example those created by AI and generative AI.

Thirdly, embracing an innovation and digital-first mindset as an organization is a continuous journey. Banking leaders have to gear up for leading in times of rapid innovation and change. This will be impossible without the right talent and skills. Significantly, our research shows that 22% of banks are not making progress in improving digital talent and skillsets.

Striking a balance between driving innovation, maintaining the stability and security of their core banking operations, while complying with ESG and data privacy mandates is the fourth challenge.

Tell me more about your predictions for banking. What will banking look like in 2030?

Interestingly, we did a crystal ball prediction for 2030 in our joint research with Qorus – this validated a lot of our thoughts on how banking in 2030 will look. 

In terms of customer engagement, about 78% of executives agree that more than 50% of banking transactions will be initiated through non-banking channels. Consequently, 85% agreed that bank branches would reduce by at least 25% by 2030.

73% believed that thanks to digital transformation, the current cost-to-income ratios of incumbent institutions would reduce substantially by the end of this decade.

Bankers will continue to accelerate the adoption of cloud-based banking, prescriptive AI, and composable core banking architecture. The survey showed that banking leaders know what awaits; for example, 81% said more than 75% of enterprise banking applications would move to the cloud by that time.

Around 55% of bankers believed that more than half of the top 10 financial services firms will combine banking with retail, healthcare and other services.


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