The global banking landscape has changed dramatically in recent years. With the rise of fintechs, neobanks, and rapid advances in technology, consumers now expect financial services that are fast, digital and personalised.
One of the biggest shifts driving this transformation is Banking as a Service (BaaS). This model allows licensed banks and fintech companies to open up their infrastructure, including payments, loans and account services. Other businesses can then use these tools to offer financial products under their own brand, while the BaaS provider handles the heavy lifting around compliance, security and risk management.
At the same time, embedded finance is taking this evolution a step further. By integrating financial services directly into existing customer experiences, non-financial companies can remove friction and add convenience — whether it is for customers, employees, suppliers, or partners. This not only strengthens relationships and improves loyalty but also creates new sources of revenue from financial transactions, ultimately increasing customer lifetime value.
Open banking allows consumers and businesses to securely share their financial data with trusted third parties to access innovative, personalised financial services. Connecting accounts enables faster credit applications, smarter money management, and seamless payments.
It promotes financial inclusion by helping people with limited credit histories access loans and credit. Driven by regulation in regions like Europe (PSD2) and innovation in markets like the USA, open banking prioritises user control, consent, and security through tokenised access.
Technology sits at the heart of these new verticals of banking, acting as the key enabler that makes it all possible. Cloud-based banking, APIs, smart contracts, big data, and blockchain each play a pivotal role in helping businesses tap into the transformative power of this new financial model.
APIs, in particular, are the backbone of BaaS and embedded finance. They create the secure, real-time connections that allow personal data to flow safely between brands and banks. Around this core, other technologies reinforce the ecosystem: cloud-based banking delivers the scalability and security required to support rapid growth; blockchain brings transparency and trust to every transaction; and smart contracts automate and streamline complex financial processes with remarkable efficiency.
Artificial Intelligence (AI) strengthens banking operations through intelligent automation, predictive analytics, and risk management. It continuously learns from transactional and behavioural data to detect anomalies, optimise lending, and enhance decision accuracy. AI models assess credit risk, predict defaults, and support capital allocation with data-driven insights.
In operations, AI improves efficiency by automating reconciliation, forecasting liquidity needs, and managing large-scale data flows. By augmenting human expertise with predictive intelligence, AI helps banks operate securely, make faster strategic decisions, and maintain financial stability in dynamic market conditions.
Generative AI (Gen AI) reshapes content-driven and analytical tasks in banking through automated document creation, intelligent summarisation, and contextual understanding. It generates financial narratives, market insights, and tailored client communications instantly from complex data.
Digital wallets integrated into smartphones and wearables enable seamless transactions across devices, providing convenient payment solutions that work regardless of location. Enhanced security comes from biometric authentication. Fingerprint, facial recognition, and retina scans prevent unauthorised access while maintaining fast, contactless experiences.
GenAI simplifies regulatory reporting, transforms raw datasets into visual dashboards, and personalises marketing or advisory materials. Its adaptive reasoning enables banks to craft precise, client-specific content while minimising manual effort. Beyond automation, GenAI empowers financial teams to focus on innovation, insight generation, and customer experience rather than repetitive documentation.
Agentic AI introduces self-governing digital agents capable of autonomous reasoning, decision-making, and action execution. These agents manage portfolios, monitor compliance, and optimise operations without human prompting. They negotiate lending terms, rebalance investments, and resolve customer issues proactively using contextual awareness.
Continuously learning from outcomes, Agentic AI adapts to market changes and evolving customer needs. This autonomy transforms banking from reactive to proactive, enabling real-time responses, predictive adjustments, and strategic foresight — delivering intelligent, always-on financial management that evolves with each interaction.
Digital wallets integrated into smartphones and wearables enable seamless transactions across devices, providing convenient payment solutions that work regardless of location. Enhanced security comes from biometric authentication — fingerprint, facial recognition, and retina scans prevent unauthorised access while maintaining fast, contactless experiences.
RegTech solutions automate compliance processes, reducing the burden and cost of regulatory adherence. AI-based Know Your Customer (KYC) and Anti-Money Laundering (AML) screening automate customer due diligence, identity verification, and watchlist screening.
IoT enhances banking through smart ATMs with predictive maintenance, real-time asset tracking for collateral monitoring, and secure, sensor-equipped branches that detect fraud. Edge computing processes data near its source, reducing latency for real-time transactions, fraud detection, and algorithmic trading while cutting bandwidth costs and ensuring reliability. RPA automates repetitive tasks like transaction processing, compliance reporting, and customer onboarding, allowing staff to focus on strategic work.
These emerging technologies collectively enable banks to operate with greater efficiency, enhance customer experiences, strengthen security postures, and maintain competitive advantage against digital-native fintech competitors.
Though most foreign banks in Bangladesh are guided by their central bank in technology adoption, many large local banks are pioneering in adopting and customising new technology to further ring-fence with evolving client needs.
Mamun Rashid Sketch: TBS
“>
Mamun Rashid Sketch: TBS
Mamun Rashid is the chairman at Financial Excellence Ltd and the founding Managing Partner of PwC Bangladesh.
Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the opinions and views of The Business Standard.