Digitalization and regulatory spending to exceed $130 billion by 2025
The cost of digital adaptation, KYC testing and regulatory technologies could exceed $130 billion by 2025.
Experts estimate that by then, about 330 million new bank accounts will be opened using digital registration, compared with 184 million in 2020. Regulatory spending will rise from 30 billion in 2020 to 130 billion in 2025.
Most companies need to think about digitizing their KYC checks and regulatory processes, otherwise they risk losing out to competitors who already use them.
This is especially true for the use of artificial intelligence in banking structures. In 2025, almost 18% of the banks' digital systems will be used by AI, compared with less than 4% in 2020.
Researchers at Juniper Research argue that this growth is primarily due to the growing need to automate tasks that are still being performed manually today, as well as the transition to global digitization, which has become even more urgent against the backdrop of the pandemic.
Over the past five years, the banking industry has undergone many changes in the quest for digital transformation. This has led to an active increase in the number of digital services. For example, so-called neo-banks or virtual banks. In addition, you should not discount the ever-increasing volume of financial online services, financial applications and other activities requiring the use of KYC. Including gambling, cryptocurrency exchanges and other elements of e-commerce.
The problem arises not so much with the transition of financial services to the digital format, as with the adaptation by regulators to it. In other words, if a business becomes digital, then the check should be done completely digitally.
Even after the pandemic passes, the world is unlikely to be the same, and consumers accustomed to the services received by smartphone are unlikely to want to go back to physical departments. Consequently, representatives of the financial industry will have to change their habits and formats, and regulators - to adapt to them