Conference goers walk under a electronic display
From artificial intelligence applications to runaway bitcoin pricing, it's easy to get lost in the stream of banking technology and fintech developments during the past year.

One of the biggest news stories of the year was the massive breach at Equifax, in which the personal data of roughly 145 million people was compromised. The aftershocks of the breach are still being felt, as lawmakers weigh changes to the credit reporting industry and the banking industry as a whole struggles with how to make systems less vulnerable to attack.

The rise and fall and rise again of bitcoin has also dominated headlines this year, with bankers like JPMorgan's Jamie Dimon staying skeptical while Goldman Sachs is planning to open a trading desk for cryptocurrency. If the price of bitcoin continues to rise, will bankers reconsider it?

More banks, meanwhile, are experimenting with mobile-only applications designed to help them reach areas where they lack a physical presence. And institutions are also increasingly trying to seize on AI or voice-enabled gadgets as a way to expand consumer banking. The question remains over how robust those platforms will prove to be, or whether Silicon Valley competitors might gain an edge in that arena.

Also unclear is whether some of those tech giants may join the banking sector. The Office of the Comptroller of the Currency continues to consider giving a charter to fintech firms, while the existing industrial loan company charter could also allow nonfinancial firms into the system.

With so much uncertainty, the only thing that's clear is how different the sector may look a year from now. Following are predictions for how the leading trends in technology will impact banking in 2018.
Artificial intelligence
Artificial intelligence (AI), data mining, expert system software, genetic programming, machine learning, deep learning, neural networks and another modern computer technologies concepts. Brain representing artificial intelligence with printed circuit board (PCB) design.

Artificial intelligence and data analytics

With much of the banking industry focused on testing and development of artificial intelligence capabilities, expect growth in three areas: client-contextualized experiences, operational efficiency and risk mitigation. With more vendors offering AI, smaller banks will begin testing applications, too.
Mobile payment app Venmo in use.

App experimentation

Banks and fintechs will feed off one another's efforts to capture younger clients. The biggest banks are likely to emulate the approach fintechs have developed to reach millennials, resulting in more banking-only apps such as JPMorgan’s Finn. In turn, fintechs will look to offer more traditional banking services.
Screen showing laptop that has been hacked

Cybersecurity

After high-profile breaches like Equifax's and relentless attacks by hackers, banks will double down on cybersecurity initiatives and spend more on modernizing IT infrastructure. Banks will also examine key vendors based on the rigor of their own cybersecurity, as well as the security of the vendor’s supplier network.
Help screen from a virtual assistant

The evolution of chatbots

Virtual assistants are expanding beyond simple interactions, beginning to offer up suggestions to customers. The ability to conduct transactions is the next step in chatbot maturity. With an added layer of authentication, banks may task chatbots with even more sensitive interactions.
Tablet and stylus sit on a table top

Commercial banking innovation

Smaller banks are discovering that by upgrading their technology, they can compete for valuable commercial clients beyond the footprint of their branches. Enabling paperless onboarding and processing, particularly in commercial lending, will attract more investment.
Where owner Jeff Bezos takes Amazon will have significant tax implications.
The silhouette of Jeff Bezos, chief executive officer of Amazon.com Inc., is seen as he unveils the Fire Phone during an event at Fremont Studios in Seattle, Washington, U.S., on Wednesday, June 18, 2014 Amazon.com Inc. jumped into the crowded smartphone market with its own handset called Fire Phone, ramping up competition with Apple Inc. and Samsung Electronics Co. Photographer: Mike Kane/Bloomberg *** Local Caption *** Jeff Bezos

A threat from Silicon Valley?

Amazon is at the top of every analyst’s list of nonbank competitors poised to enter the space. But other tech giants like Google or Apple could try to get in on the action.

Banks should gird for disruption from such deep-pocketed tech firms as regulatory efforts, including the OCC’s fintech charter or an ILC, may potentially offer them a way in.
Closeup of wiring in a bank data server.

Data sharing

More banks will share data with third parties through application programming interfaces. But without regulation, there won’t be a movement to European-style open banking. Customers will, however, get more options on how they want their data shared and where, possibly with a subscription service, or by turning their physical cards on and off with a mobile app.
Fintech funding figures for 2013 and 2018

Fintech investment

U.S. fintech companies will receive $4.7 billion from all types of investors in 2018, according to the research firm Statista. The firms most likely to reap investments are those developing blockchain, AI and machine learning technologies.
An employee uses a laptop computer branded with bitcoin logos inside the offices of La Maison du Bitcoin bank in Paris.

The mainstreaming of cryptocurrency?

There will still be plenty of stories about bitcoin in 2018, as prices will undoubtedly continue to fluctuate wildly. But Goldman Sachs’ decision to trade bitcoin demonstrates how Wall Street in 2018 will expand initial efforts to profit from the popularity of cryptocurrency.
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