Amid the rapidly evolving financial landscape, the new HSBC Digital Horizons Report, which sought the views of 2,900 c-suite and business decision-makers, delivers a comprehensive exploration of the emerging trends and innovative advances taking hold across digital banking and the fintech sphere.

Following the launch of the new version of OpenAI’s ChatGPT app at the end of 2022, there can be no doubt that the world of business is hurtling ever-faster towards a digital future.

In fact, over the coming decade, advances in artificial intelligence (AI), automation, robotics, quantum computing and other emerging technologies will allow dramatic gains in productivity as machines take on more complex tasks.

As our report sets out, the banking sector is already embracing this transition – leveraging digitalisation to deliver both operational benefits and a greater customer experience.

However, this acceleration of digital technology has profound implications, too. Governments are already racing to draw up new regulatory frameworks that aim to mitigate the risks of AI, wary of the safety and social threats of unchecked development. The future – while clearly digital – is unlikely to be completely plain sailing.

With this in mind, our report looks at the challenges that accompany the ongoing digital transition, including issues of data security and regulatory adaptation.

Yet, despite these hurdles, the report also emphasises the strategic importance of continued digital innovation in banking – underscoring the need for a balanced, risk-conscious approach to integrating these new technologies.

The report presents a clear picture of the current banking landscape – and the drivers behind the ongoing uptake of digital technologies. These include:

These include:

• The increasing significance of digitalisation across the sector: With convenience, speed and accessibility driving a growing number of consumers towards online and mobile channels for their banking needs, traditional banks are investing heavily in digital transformation to remain competitive.
• The transformative role of advanced technologies: Technologies such as AI and machine learning are playing a transformative role in shaping the future of banking. These innovative tools hold the potential to revolutionise various areas, including customer service, risk management, and fraud detection.
• How digitisation can enhance operational efficiency for banks: By automating routine processes and reducing human error, banks can improve customer satisfaction.
• The potential risks and challenges that accompany digital transformation: From cyber threats to data privacy concerns, the report emphasises the importance of robust security measures and regulatory compliance in mitigating these risks.

Future business characteristics

Drawing on expert interviews and quantitative research, our report also details four characteristics for business success in the next decade – delivering a guide to help CEOs, CFOs and senior leaders take steps today to align their priorities with the demands in the run up to 2030.

In an age of advanced technology and globalisation, businesses are no longer confined by geographical borders. The traditional brick-and-mortar business model is giving way to borderless business models that leverage digital tools for communication and collaboration. This model allows businesses to reach a wider audience, tap into new markets, and access a global talent pool.

Borderless businesses are drawing on digital technologies in a number of ways to empower their advance:

• Elimination of physical barriers: With borderless business models, companies can operate remotely and reach customers anywhere in the world without the need to set up physical offices in different locations.
• Emphasis on virtual collaboration: By heavily relying on digital tools for communication and collaboration with teams, partners, and clients, businesses not only save time and resources but also enable real-time communication and foster innovation.
  On a day-to-day basis, the move towards borderless business is also fuelling a number of micro trends:
• Immersive collaboration: This trend harnesses the power of virtual and augmented reality technologies to create a highly engaging and interactive experience for remote teams. It gives team members the feeling of being in the same room, thereby enhancing brainstorming sessions, feedback sharing and project collaboration.
• P2P rising: Peer-to-Peer (P2P) networks are witnessing a surge in popularity, particularly within borderless businesses. P2P networks enable users to share resources and services directly with each other, bypassing the need for intermediaries. This not only curtails costs but also fosters a sense of community and trust among users.
• Active relationships: The success of borderless businesses hinges on forging robust relationships with clients, partners, and suppliers. Such relationships are built on the foundation of active communication, transparency and trust. Leveraging virtual tools, businesses can keep the communication channels open, resulting in more meaningful and enduring relationships.

Fast, Light, Innovative, Tech-driven (FLIT) organisations are rapidly setting the benchmark for business operations in the digital era. Distinguished by their agility, adaptability and tech-driven approach, these companies are transforming industries and redefining customer expectations.

FLIT organisations capitalise on advanced technologies, agile methodologies and innovative strategies to deliver exceptional value to their customers. They are disrupting traditional business models, raising the bar in terms of speed, efficiency and customer centricity.

FLIT organisations are drawing on digital technologies in a number of ways to empower their advance:

Powered by AI: Artificial Intelligence (AI) plays a pivotal role in the operations of FLIT organisations. From automating mundane tasks to providing real-time insights and personalising customer experiences, AI is the driving force behind these companies’ technological prowess.

Instant payments, everywhere: Digital payments have revolutionised transaction processes. FLIT organisations harness this technology to offer instant, seamless and secure payment options, enhancing customer convenience and fostering trust.

In terms of micro trends, an increasing number of FLIT organisations are adopting low-risk business models. These models emphasise lean operations, scalability and flexibility, empowering companies to promptly adapt to market shifts and customer demands.

Inclusive automation refers to automated systems that are designed and accessible for a diverse population. These systems ensure that technology is not just available to a privileged few, but is inclusive, catering to individuals of all backgrounds, abilities and skill levels. Inclusive automation not only eliminates barriers for disadvantaged groups, but also spurs innovation and drives business growth.

Immersive automation is fuelling two clear macro trends:

Duty of care: A growing trend in the tech industry relates to the "duty of care" companies have towards their users. As technologies become more pervasive, businesses are expected to take responsibility for the societal and individual impacts of their products.

Knowledge athletes: The rise of "knowledge athletes" represents the increasing demand for individuals who can efficiently navigate and utilise the wealth of information available in the digital age. These individuals leverage data and technology to solve problems, make decisions and innovate in their respective fields.

In terms of macro trends, immersive automation is also fuelling a rise in ethical frameworks. As technology evolves, so must the ethical frameworks that guide its use. These frameworks should be designed to ensure fairness, transparency, and respect for user privacy.

How to stand out in a generic world will become the key to business survival in 2030. Amid a proliferation of generative AI content and other emerging technologies, successful companies will be able to come up with fresh ideas and stay one step ahead of the competition.

Successful companies will feel more like research labs, places devoted to creativity.

They will foster an environment for innovation to thrive by giving employees the freedom to think differently. This will not come naturally. Businesses will need to rethink their approach to talent and training, particularly because these skills are not ones students focus on at school.

The rise of the creative edge is fuelling a number of micro trends:

Training the visioneers: The journey towards fostering creativity begins with educating our visioneers – those individuals who perceive possibilities where others see only challenges.  With the right training, visioneers can be equipped with the tools they need to shape the future.

Building creative spaces: Building environments that are conducive to creativity is a fundamental aspect of this process. These spaces should encourage free thinking, promote collaboration and reward innovation.

Nurturing the ecosystem: Creativity does not exist in isolation – it thrives within an ecosystem of ideas, inspirations and influences. Nurturing this ecosystem involves fostering a culture of curiosity and openness, where new ideas are welcomed and celebrated. It also means creating support systems that enable these ideas to grow and flourish.

As well as exploring these trends in greater detail, our HSBC Digital Horizons report also delivers a roadmap for businesses and financial institutions to get themselves fit for the future world.