It is commonly known that the financial services industry is transforming to meet digitisation. How far will banks need to transform their operations to meet the market evolving trends? According to PwC's global study in the industry, new technology forces will affect the sector.
FinTech is driving the new business model
Since the time of the study, this has evolved to forming partnerships, new start-ups and new offerings that have advanced due to changes in the customer behaviour which could range from robo-advisory to e-Wallets. There is an increasing demand for FinTech services in the wealth management as well as the banking sector which encourages firms to adopt this model.
Sharing economy
Indeed, the change of product offering of big tech firms is trying to match the way consumers perform payments and transactions. It is a reality that GAFA are embarking into creating an evolving payment environment through modern technologies i.e. blockchain and online payments. Certainly, this would need to be in a regulated environment to meet the competition guidelines. However, banks would need to re-think their partnerships and the offering available.
Blockchain is affecting the way to do business
Although still in development, unquestionably partnerships are formed among large technology and financial services firms to support blockchain capabilities. The main objective is to be well prepared when blockchain “will go on to become an integral part of financial institutions’ technology and operational infrastructure”.
Digital becomes mainstream
Much has been said and done to this respect, as it has become clearer over the years that changing consumer patterns along with technology evolution lead to a far more digitalised environment for financial institutions offering a range of services across mobile-native, cloud-enabled interactive applications that support all range of operations. This, of course, is expected to further increase with the use of AI-driven technologies, machine learning etc., aiming to enhance customer experience and operational efficiency while being able to manage big data and analytics.
Customer intelligence & analytics
This is rapidly evolving with the ability to analyse and process data so as to deliver to customers what they need, evolving from personalisation to “individualisation”. This will create the opportunity to use analytics to unlock the information “inside”, giving customers what they really want.
AI technologies to be utilised across places
AI is rapidly evolving in the financial services sector with many studies claiming these days that huge cuts in cost will be achieved, with the automation of operations and greater personalisation to customer needs. The ability to identify patterns and make propositions is already something that many financial services platforms possess, to be deployed wisely across the operations in managing large data and analysing the patterns that would help users reach a faster and desired decision.
Public cloud will be widely accepted
Despite the initial reservation, many financial institutions had about storing data in public cloud, over the past years, the evolution of technology and cloud providers has developed to such a degree that is being safely considered to be utilised, following utmost security standards to be able to deliver a flexible personalised experience at a low cost.
Cyber-security
The evolution of technology also brings greater cyber threats. This is inevitable when processing large data cross-border and with rapidly evolving technologies. However, systems are already evolving to offer security and safeguard the business from potential threats.
The Asian market is becoming a technology-driven innovation center
Across the continent, new businesses both in terms of technology and financial service offering are emerging. Businesses in Asia have invested in technology for many years and now harvest the results of faster services. Over time, “more jobs in cities have led to better technology infrastructures, which has attracted employers who can now serve global markets”.
Regulators will turn to technology too
According to the study - and this is being realised - “Regulators are rapidly adopting a wide range of data gathering and analytical tools, too. They are trying to learn more about individual institutions’ activities and overall systemic activity. They also hope to monitor the industry more effectively and to predict potential problems instead of regulating after the fact.”
So with these in mind what are the key priorities for 2020
- Modernising IT operating models to compete effectively
- Investing in AI technology/cloud/SaaS would reduce cost and offer faster customer response
- Building the technological capability to analyse customer data more efficiently
- Rethinking the IT architecture to encompass the mentioned trends
- Evaluating cyber-security protection framework
- Getting the right people to work with
Profile Software, with more than 30 years in the financial services industry has invested in developing platforms that address emerging trends and customer needs. Its platforms support APIs, AI technology, and compliance all being focused on a client-centric approach so as to ensure competitive service offering for financial institutions.
See original blog: https://www.profilesw.com/en/enewsletter/1457-priorities-for-2020-in-financial-services.php
