These are the top 10 tech trends that will shape the coming decade, according to McKinsey

“We’ll experience more technological progress in the coming decade than we did in the preceding 100 years put together, says McKinsey.

Applied Artificial Intelligence (AI)

We are still only in the early days of the development of AI. As the technology becomes more sophisticated, it will be applied to further develop tech-based tools, such as training machines to recognize patterns, then act upon what it has detected.

By 2024, McKinsey estimates AI-generated speech will be behind more than 50% of people’s interactions with computers. Companies are still searching for ways to use AI effectively though, the consultancy says: ‘While any company can get good value from AI if it’s applied effectively and in a repeatable way, less than one-quarter of respondents report significant bottom-line impact.’”

https://www.weforum.org/agenda/2021/10/technology-trends-2021-mckinsey/

The growth triple play: Creativity, analytics, and purpose

– “Only 7 percent of companies are delivering on the growth triple play by unifying creativity, analytics, and purpose. They are driving average revenue growth of 2.3 times versus peers from 2018–2019 (which increased to 2.7 times versus peers from 2019–2020).

– In the period 2018–2019, companies using just one of the capabilities—either creativity, analytics, or purpose—saw an average growth rate of more than 6 percent. Adding a second component saw growth rates climb to more than 7 percent. For those that employed the full triple play, growth rates climbed to more than 12 percent.


– CMO’s have a once-in-a-generation opportunity to lead growth, as 78 percent of CEOs are now banking on CMOs and marketing leaders to drive growth.”

https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/the-growth-triple-play-creativity-analytics-and-purpose

Building the AI bank of the future

New report from McKinsey. Building the AI bank of the future. Summary of the contents:

  • “AI bank of the future: Can banks meet the AI challenge? Artificial intelligence technologies are increasingly integral to the world we live in, and banks need to deploy these technologies at scale to remain relevant. Success requires a holistic transformation spanning multiple layers of the organization.
  • Reimagining customer engagement for the AI bank of the future Banks can meet rising customer expectations by applying AI to offer intelligent propositions and smart servicing that can seamlessly embed in partner ecosystems.
  • AI-powered decision making for the bank of the future Banks are already strengthening customer relationships and lowering costs by using artificial intelligence to guide customer engagement. Success requires that capability stacks include the right decisioning elements.
  • Beyond digital transformations: Modernizing core technology for the AI bank of the future For artificial intelligence to deliver value across the organization, banks need core technology that is scalable, resilient, and adaptable. Building that requires changes in six key areas.
  • Platform operating model for the AI bank of the future Technology alone cannot define a successful AI bank; the AI bank of the future also needs an operating model that brings together the right talent, culture, and organizational design.”

Here are a few of my favorite points:

  • “To compete and thrive in this challenging environment, traditional banks will need to build a new value proposition founded upon leading-edge AI-and-analytics capabilities. They must become ‘AI first’ in their strategy and operations.
  • More broadly, disruptive AI technologies can dramatically improve banks’ ability to achieve four key outcomes: higher profits, at-scale personalization, distinctive omni-channel experiences, and rapid innovation cycles.
  • Across diverse global markets, between 15 and 45 percent of consumers expect to cut back on branch visits following the end of the crisis.
  • Leading financial institutions’ use of advanced AI technologies is steadily increasing. Nearly 60 percent of financial-services sector respondents in McKinsey’s Global AI Survey report that their companies have embedded at least one AI capability.
  • Without a centralized data backbone, it is practically impossible to analyze the relevant data and generate an intelligent recommendation or offer at the right moment.
  • To become AI-first, banks must invest in transforming capabilities across all four layers of the integrated capability stack: the engagement layer, the AI-powered decisioning layer, the core technology and data layer, and the operating model.
  • Creating a superior experience can generate significant value. A McKinsey survey of US retail banking customers found that at the banks with the highest degree of reported customer satisfaction, deposits grew 84 percent faster than at the banks with the lowest satisfaction ratings.
  • Improving websites and online portals for a seamless experience is one of the top three areas where customers desire support from banks.
  • McKinsey research has identified 12 distinct ecosystems that have begun to form around end-to-end customer needs within distinct service domains. We estimate that these integrated networks will generate approximately $60 trillion in global annual revenues by 2025.
  • Research shows that the stronger the experience and the more satisfied the customer, the more likely it is that the bank will generate higher revenue: a more satisfied customer typically accounts for approximately 2.4 times more revenue than a neutral customer.
  • An organization must establish a mechanism to “translate” analytical outcomes into compelling messages to communicate to the customer at the right time, through the preferred channel—be it email, SMS, mobile app, website, branch staff, or a relationship manager—according to the time of day.
  • For example, a sound DevOps and release-management strategy can contribute to a 25 to 30 percent increase in capacity creation, a reduction in time to market of 50 to 75 percent, and more than a 50 percent reduction in failure rates.
  • As banks build sophisticated technical solutions, they also need to develop a culture suited to the experts building these solutions. Organizations need to manage culture and capabilities to create a virtuous circle that attracts talent, sparks innovation, and creates impact. This underscores the importance of talent and culture in tech-enabled transformations, including AI-bank transformations.

Here’s a link to the full PDF document: https://www.mckinsey.com/~/media/mckinsey/industries/financial%20services/our%20insights/building%20the%20ai%20bank%20of%20the%20future/building-the-ai-bank-of-the-future.pdf


Renny Thomas
Senior Partner, Mumbai
Renny_Thomas@mckinsey.com

McKinsey Classics: How artificial intelligence changes the executive’s role

“As AI grows in power, the likelihood of sinking under the weight of even quite valuable insights grows as well. The solution would be to democratize information by encouraging business units and functions to make more and better decisions themselves. To learn how the mounting importance of both soft management skills and high technology makes the senior executive’s work more interesting and complex, read ‘Manager and machine: The new leadership equation.’”

https://www.mckinsey.com/~/media/McKinsey/Email/Classics/2020/2020-01-classic.html

Top 6 AI Posts of 2019

Here’s a quick summary of our top 6 most impactful posts in 2019.

Udacity launches nontechnical AI product manager nanodegree

Udacity launches nontechnical AI product manager nanodegree


An executive’s guide to AI – McKinsey

An executive’s guide to AI – McKinsey


Become an AI Company in 90 Days

Become an AI Company in 90 Days


“AI For Everyone”: Course Review & Key Takeaways

https://towardsdatascience.com/ai-for-everyone-course-review-key-takeaways-177be96330fe


The 7 steps of machine learning

The 7 steps of machine learning


2019 AI eCommerce Spotlight Awards

2019 AI eCommerce Spotlight Awards