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- Key insight: New technologies are enhancing the ways banks conduct their businesses and drive value for customers, employees and shareholders.
- What’s at stake: Cumbersome, manual front-end processes create bottlenecks that slow decision-making.
- Forward look: As these technologies become more widely adopted, they will increasingly help determine which institutions are able to operate efficiently, manage risk effectively and respond quickly to the needs of their customers.
As I mentioned in
Below, I review several areas where this change is taking place.
Many of the most meaningful changes are occurring not only in customer-facing channels but in the operational systems that support lending, payments, risk management and compliance. These are often the systems that bankers interact with every day but that customers rarely see.
One clear example is lending origination, which is being materially improved by new technology tools, with AI playing a critical role.
Small-business lending remains one of the most important and relationship-driven activities for banks. Yet many of the front-end processes supporting it remain manual. Borrowers are often asked to fill out static PDFs, respond to repeated document requests, participate in long email exchanges, and wait for follow-up during business hours, creating bottlenecks that slow decision-making.
I recently spoke with a community banker who described a typical small-business loan file containing more than 30 separate email exchanges simply to collect financial documents. By the time the file was complete, weeks had passed.
Anyone who has worked with small-business borrowers knows how quickly these frictions accumulate. Applications stall or are abandoned before submission. Lending teams spend significant time chasing documentation and correcting errors. Loan officers often find themselves focused more on intake than credit analysis. When banks attempt to scale lending activity, they frequently must add staff rather than improve throughput.
New AI-enabled systems are beginning to change this dynamic. Borrowers can move through guided digital applications, documents can be collected and analyzed in real time and key underwriting tasks can be automated within the lender’s workflow.
This shift can lead to faster origination, less manual effort for lending teams and higher completion rates. More importantly, it allows bankers to spend more time working with customers and making credit decisions.
In commercial banking, clients increasingly expect banking services to exist within the enterprise resource planning, or ERP, platforms they use every day. Yet many banks still require customers to leave those systems, log into separate portals, download files and manually reconcile transactions.
This fragmentation creates unnecessary friction. Finance teams waste time switching between systems. Manual file handling increases errors and delays. Because interactions only occur when clients log into the bank portal, engagement with the bank often becomes episodic rather than part of their daily workflow.
One finance executive recently remarked to me that while her accounting team spends nearly the entire day inside its ERP system, the bank still sits “somewhere outside the workflow.” That gap is precisely what many institutions are now trying to close.
Embedded banking platforms are beginning to address this problem. Payments initiation, real-time account visibility, reconciliation and approval processes can increasingly occur directly within ERP systems where finance teams already operate.
For commercial clients, this means initiating payments, accessing cash positions and reconciling accounts without leaving their workflow. For banks, it means becoming more deeply integrated into their clients’ day-to-day operations, strengthening relationships and often increasing deposits and payment volumes. Put simply, the bank becomes part of the operating system of the business rather than a separate destination.
Fraud prevention is another area where technology is delivering substantial improvements for banks. This is not optional modernization. The criminal element is itself constantly upgrading its tools, and banks must do the same while also ensuring the systems they deploy work together effectively. Fraudsters rarely operate in silos, and bank systems cannot either.
Over time, identity verification and fraud prevention have become increasingly fragmented. Many institutions have layered multiple data providers, rules engines and point solutions across products and channels. The result is often siloed decision-making, inconsistent outcomes and rule sets that are difficult to update as threats evolve.
I have seen cases where one tool flags a meaningful threat, but the signal was missed because it was not sensibly integrated into the broader fraud prevention framework. In these situations, the issue is rarely the absence of data but the lack of coordination among the systems designed to detect fraud.
New platforms are emerging that help institutions bring these existing tools onto a unified framework across onboarding and ongoing customer activity, ensuring that the systems designed to detect fraud are able to work together quickly enough to keep pace with increasingly sophisticated attacks.
Finally, few areas of bank operations have grown as complex — or as closely scrutinized — as third-party risk management. Banks now rely on a growing network of outside vendors supporting everything from payments and cloud infrastructure to compliance and operational systems. As those networks expand, so does the responsibility for monitoring and managing the risks they introduce.
Yet in many institutions, vendor oversight remains largely manual and episodic. Risk teams spend weeks conducting reviews. Staff devote significant time chasing documentation. In some cases, vendor files still consist of long questionnaires, policy documents, and spreadsheets passed back and forth across departments. By the time a vendor review is complete, the information inside the file is sometimes already out of date.
Instead of assembling vendor files piece by piece, new procurement and third-party risk management systems can automatically review security, legal and compliance documentation while monitoring vendor risk signals on an ongoing basis. In practical terms, that means risk teams can spend less time collecting information and more time evaluating it.
The most compelling innovation in banking today is not about flashy interfaces or speculative applications of technology, it is about strengthening core functions such as lending, payments, risk management, and compliance. As these technologies become more widely adopted, they will increasingly help determine which institutions are able to operate efficiently, manage risk effectively and respond quickly to the needs of their customers.
In many respects, that work has only just begun.