As Artificial Intelligence (AI) continues its ascent, captivating the global imagination and reshaping industries, the financial sector stands on the brink of transformative change. A 2023 Forrester survey indicates that 63% of business and tech leaders plan to increase their investments in emerging technologies in the coming year. However, despite this fervor, only 18% reported high success rates in their previous year’s tech initiatives. This stark contrast highlights the hurdles and prospects in harnessing technology for financial innovation.
Looking ahead to 2024 and beyond, it’s crucial to identify which nascent payment technologies will revolutionize transactions, customer interaction, and security, and which will fall short. This goes beyond merely keeping up with technological progress; it’s about ensuring companies strategically invest in technologies that offer real benefits, customized to their specific business needs and goals.
In Forrester’s recent research on the emerging technology in payments, we used Forrester’s benefits horizon model to organize the key technologies into three groups: short-, mid-, and long-term benefit horizons. We expect the following emerging technologies to deliver the benefits needed to justify sustained investment for most businesses in:
Less than two years: Conversational AI, edge intelligence, and zero-party data platforms. Some payment pioneers have combined large language models (LLMs) into chatbots to build direct-to-end-user deployments and accelerate conversational AI use. Edge intelligence will elevate digital experience, security, and payment performance. Zero-party data platforms also enable payment firms to manage customer data.
Between two and five years: generative AI (genAI), AI agents, blockchain, and explainable AI (XAI). GenAI accelerates chatbots and AI agents (also called Automated Workplace Assistants or AWAs) and has promising back-office use cases, including in using TuringBots for developers. Take caution as these technologies will take time to mature. Forrester does, however, expect all four of these technologies to deliver significant benefits for most payment firms in two to five years.
In more than five years: Web3 and quantum security. Payment firms will need to make a defensive play with quantum security in the coming years and are wise to start understanding the implications of it now. For Web3, do keep this in your watchlist as some already have their eyes on building services related to digital assets.
Strategic Considerations for Your Firm
The technologies outlined in this report are pivotal for firms aiming to stay at the forefront of innovation and customer satisfaction. For an in-depth exploration of how these emerging payment technologies can redefine your business landscape in 2024, we invite you to read this report and connect with Lily Varon, Pushpa Marwal or Meng Liu via inquiry or a guidance session to learn more.
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{Author}Pushpa Marwal{/Author}
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