Jason Chorlins, CPA, CFE, CAMS, CITP Principal, Risk Advisory Services Miami

1. Do you see banks doubling down on innovation and game-changing technologies? What would hinder banks from pursuing this?

Jason’s response:

Yes, we see banks and financial institutions focusing on investing in technology and innovation in 2022.  With the assistance of innovation, banks are rethinking back-office processes while consumers are increasingly focused on experiences that are driven by their digital devices. The majority of banks and financial institutions are still supporting processes that rely on human beings, paper and severely outdated back-office processes that inhibit the deployment of fast, simple solutions that enhance banking customers’ experiences while making it a more seamless process.

We’ve seen a bigger push by banks leveraging automation to increase efficiency and improve experiences.  By leveraging data and analytics, and automating repetitive processes through robotic process automation (RPA), financial institutions can have much smaller units run value-added tasks, such as deal origination, know your customer (KYC) validation, basic data collection and distribution of data throughout the organization, etc. RPA provides the benefits of cost reduction, increased efficiency, enhanced accuracy, improved customer experiences, and seamless flexibility. Similar to the movement toward cloud computing, automation will continue to gain momentum because of the growing number of external providers who have leveraged prior experience to provide scalable solutions at a reasonable cost. Process automation tools such as RPA and digital process automation (DPA) will continue to enjoy significant growth in 2022 as banks start realizing the benefits beyond improved efficiency.

One of the reasons for the challenges in deploying game-changing technologies is the difficulty in identifying, recruiting and developing a more modernized workforce. There is a significant void of capable talent in the industry that can help implement and maintain these innovative technologies, which we see as the biggest challenge for banks taking the innovation plunge.  Additionally, top talent is being lured away to FinTechs that provide opportunities to work on the cutting edge of the financial industry.

2. What are some predictions for banks in 2022?

Jason’s response:  

We see banks continuing to adapt to the change in the financial services industry, specifically the push to digital banking.  The rise of digital banking offers improved customer experience and helps financial institutions deliver faster and more efficient service. More and more consumers are moving to online banking and will continue into 2022.

Additionally, the trend of mergers and acquisitions for the banking industry will continue into 2022 as banks are trying to expand geographic footprints and build critical mass. Traditional banks are finding new partners to merge with.  We’re seeing smaller banks and FinTechs planning mergers to leverage technology and the banking infrastructure. The logic behind both deals is compelling: Each offers new ways to bring in new banking customers and drive profits in the times of lower interest rates by leveraging the technology of FinTechs.

3. What are some trends from this year that will remain into 2022? And how can banks adapt to these trends?

Jason’s response:

Due to the changing consumer habits accelerated by the COVID-19 pandemic and other trends, bank branch closures are on the rise.  The rise of digital banking offers improved customer experience and delivers faster and more efficient services. More and more consumers are moving to online banking and will continue into 2022.  Digital banking is not just about going paperless and cashless, the underlying technologies have contributed to the shift from a centralized traditional banking model to a more distributed, technology-driven one.   More than ever, banks realize that a seamless digital customer experience can’t be delivered without a digital-first back-office. This includes more efficient new account opening, customer onboarding and digital loan application management for creating a truly digital experience.

Neobanks are disrupting the traditional banking system by leveraging technology and artificial intelligence (AI) to offer a range of personalized services to customers without them having to step foot in a branch.  The term “neobank” started gaining prominence globally back in 2017 as they emerged as a new challenger to the traditional banks in terms of customer engagement, connectivity, reach, and user experience. That is why neobanks are also referred to as “challenger banks,” and the potential for neobanks is driven primarily by the rise of a digital world.

4. Any trends in Fintech, mobile banking and AI?

Jason’s response:

Data Analytics and Artificial Intelligence (“AI”) will differentiate winners from the laggards.  Data and analytics are the fuel that powers the components of the digital banking revolution. In 2022, it is expected that the combination of data and AI will be the most important differentiator in the financial services marketplace, truly separating those who understand how to best utilize the data and leverage technological resources such as AI.

Customers expect their bank to know what they want, understand who they are and reward them for banking with them.  They want these rewards in real-time based on their daily activities and changes in their financial profile. Using data and related analytics while partnering with third-party solution providers, banks will be able to replicate the intelligent experiences that customers have become accustomed to such as streaming movies and music, as well as getting groceries and other items delivered to their home.

The way of future banking experiences will become more universal as conversational AI makes customer’s banking interactions more proactive and human-like, such as chat-bots or virtual assistants.  Beyond the basic tasks of checking balances and transferring money, this interactive technology will be able to complete more involved tasks like a financial advice and make recommendations on products based on banking behaviors.

5. What is the future of traditional banking? What are some major risks and challenges?

Jason’s response:

We will see the continued adoption of digital banking, leveraging of technology to create more efficient and interactive banking experiences outside of traditional banking.  The banking industry will also take the lead from FinTechs in leveraging data to deploy automation and AI to help provide an overall better banking experience for customers.  The banking experience will be enhanced with more automated and streamlined front- and back-office operations, improving the customer experience.

The innovation movement will pick up more steam as banks start to see the return on investment and the technology is more widely adopted, and this will in turn improve as more employees are engaged in the automation journey.   The challenges for banks will still be competing for customers, battling new and emerging technologies and increased regulatory burdens on financial institutions.  These are also the biggest challenges that FinTech organizations are not currently facing – they are able to recruit professionals, develop new technologies and attract new customers without all of the regulatory pressures.

Jason’s Bio:

Jason Chorlins spearheads forensic and financial service investigative engagements as the banking practice co-leader of Kaufman Rossin’s risk advisory services practice. He advises clients on money laundering, internal corporate investigations, due diligence and regulatory compliance matters to help them manage risk.

He oversees anti-money laundering (AML) and Bank Secrecy Act (BSA) consulting engagements and assists financial institutions with transaction look-backs, risk assessments, BSA/AML/OFAC independent testing and customer due diligence reviews. He is an industry leader in assisting financial institutions to perform data and model system calibrations and validations for account and transaction surveillance systems.

Since joining Kaufman Rossin in 2007, Jason has advised a wide range of financial institutions from small, privately owned banks to large, multinational institutions in the United States, Central America, South America and the Caribbean.

Jason speaks frequently on BSA/AML and fraud matters across the country, and sits on the ACAMS Education Task Force and board of directors of the Southeast Center for Financial Training (CFT). He is a former professor at the University of Missouri-Columbia’s accountancy program and past president of the board of trustees of the FICPA Educational Foundation. He has been recognized as one of the top professionals under the age of 40 by The South Florida Business Journal, and as one of the Top 26 CPAs under the age of 36 by the Florida Institute of CPAs.

He is a Certified Public Accountant (CPA) in Florida and Missouri, Certified Fraud Examiner (CFE), Certified Anti-Money Laundering Specialist (CAMS) and Certified Information Technology Professional (CITP).