Growing AI and API Challenges in Financial Services Require New Perspectives

Financial services are altering the way their customers and employees interact with digital technology through AI, with the report revealing that over 80% of organizations now integrate AI into their systems. This extensive adoption is not surprising given AI's potential to boost efficiency, enhance decision-making, and provide more personalized experiences to account holders. However, the same report highlights a critical concern around the impact of performance across all aspects of AI models. Poor performing AI models can lead to latency and impact the consumer experience—a concern that even ranked higher in the report than the cost concerns associated with AI implementation.

As FinServ institutions attempt to soften the negative impacts associated with potentially underperforming AI models, the report appropriately highlights a notable trend: the rise of AIOps. This approach has emerged as the second most significant priority for decision-makers in the financial services sector. The growing reliance on telemetry for automation is propelling this trend, as financial services organizations seek to streamline operations and reduce human error. As AI technology continues to mature, those who invest in building a flexible IT infrastructure capable of rapidly supporting new technologies will be best positioned to capitalize on innovation, driving growth, and improving service offerings.

The financial services industry is increasingly relying on APIs to facilitate smooth transactions and efficient data exchanges. This has resulted in the exponential growth of APIs, which are vital for enabling account holders to conduct digital transactions from anywhere. So, the importance of robust API security strategies cannot be overstated. The new vulnerabilities associated with API sprawl can be mitigated by more advanced API security protocols, which better safeguard sensitive data and maintain consumer trust.

Not surprisingly, improving API security has emerged as a top priority, prompting almost all organizations to implement or enhance their API protection strategies. On average, financial services manage approximately 600 APIs, according to the report, a figure that is steadily growing as app modernization efforts expand and AI deployments accelerate. Of course, the API count is in the thousands for enterprise financial services organizations, which adds even more complexity—and this is before we even consider how many more API endpoints are associated with these APIs.

The report also reveals that 45% of financial organizations are adopting API discovery capabilities, crucial for maintaining control over their digital ecosystems where zombie APIs and/or shadow APIs often remain hidden and unexposed in many institutions. As a side note, finding API security solutions that both discover and automatically protect these APIs is highly recommended to minimize the amount of time these vulnerabilities exist unprotected. This consideration is particularly crucial in the era of open finance.

Hybrid, multicloud environments are transforming the operations of financial services by providing greater flexibility and resilience. These environments allow organizations to choose the best cloud platforms for specific tasks, optimizing performance and cost efficiency. Despite these benefits, the report identifies significant challenges, with 95% of financial services organizations struggling with issues related to multicloud deployments.

Topping the list of challenges, according to the report, are management complexities and security concerns—requiring institutions to implement comprehensive strategies to maintain a secure and efficient multicloud infrastructure. Flexibility is a key consideration, as 66% of respondents emphasize the importance of selecting cost-effective solutions that meet their requirements. Interestingly, while business continuity is a priority for global respondents, financial services decision-makers are particularly drawn to the AI workload advantages offered by multicloud configurations.

The move toward adopting hybrid, multicloud environments highlights the need for expertise in managing diverse cloud platforms while maintaining high security standards. Financial institutions must invest in training and resources to navigate this complex landscape effectively, ensuring that they can leverage the full potential of multicloud technologies, while mitigating the associated cybersecurity risks.