Technology is changing, and you need to start preparing!
Technology is changing the way the world works, and if you work in Financial Services, you need to start preparing. According to PwC's annual CEO survey, asset and wealth managers do not appear to be taking the technological threat seriously enough, with PwC's global asset and wealth management leader stating:
"Technology is a disruptive force and I am amazed by how low the sector's survey responses are around digital and cyber security."
The Financial Services landscape is already shifting, and we are entering what many in the industry are calling 'the era of FinTech'. Many pioneering companies have already embraced this technology, which is seeing a change towards utilising technology in business functions previously carried out by traditional (human) workers. This drive can be traced back to two unique selling points:
Better use of data
An example being Kabbage, a FinTech company that collates data such as business volume, transaction volume and social media activity to determine credit amounts for SME's.
Frictionless Customer Experience
BrainTree is an 'all in one' payments partner company, who allows it's users to process payments using any system (e.g. Paypal, Apple Pay, Bitcoin etc.) through their smartphone.
According to a report by McKinsey,$23 billion of venture and growth equity has been deployed into FinTech over the past five years, with more set to be invested in the near future.
So, what are the top 3 FinTech trends to watch in 2017?
1. Artificial Intelligence (A.I.)
Artificial intelligence, or A.I., in the context of Financial Services, refers to technology that is so advanced it can take on tasks currently carried out by people and oftentimes perform them much quicker and with more accuracy than human workers.
The type of A.I. gaining the most traction in the Financial Services industry are "chatbots". The term "chatbot" is a portmanteau - an amalgamation of the words "chatter" and "robot". Chatbots have the potential to increase customer satisfaction and reduce costs for companies by taking over tasks that would usually require a telephone call or an in-branch meeting. FinTech companies have been using chatbots to help customers transfer money, ask questions and get financial advice with ease.
The main criticism of chatbots within the industry thus far, is the absence of the "human touch". Chatbots do not yet have the functionality to handle frustrated customers on an empathic level and as such, should only be used for repetitive tasks that do not rely on them possessing human emotional range. So although chatbot technology may result in a decline of customer-centric roles in the short term, it may be some time until they are able to provide a comprehensive 360 service to businesses.
In fact, chatbots can actually assist in the recruitment process. Take a look at our previous article 7 Ways HR Will Change in 2017 to find out how.
Automating tasks is going to be a "no-brainer" for Financial Services moving forward. Automation increases accuracy and minimises errors whilst at the same time, eliminating repetitive tasks for businesses, therefore allowing tasks to be completed much faster and efficiently.
Of our 3 FinTech trends outlined in this blog, Automation is currently the most utilised in the Financial Services industry so far. One FinTech business that has started to dabble with automation is Leverate. Leverate is an international software and technology provider using Automation as a trading platform for traditional brokerage businesses. According to CEO, Kobi Gur:
"For brokers to survive, they need to improve their acquisition, conversion, and retention funnels through automation. By automating the conversion and retention processes, brokers can guide traders through the funnel and contact them at key decision making points, resulting in higher reach, reduced staffing needs and ultimately, a boost in ROI."
The key point here is "reduced staffing needs". The rise in Automation is set to reduce certain roles within the Financial Services industry. However, as with implementations of new technologies in the past, Automation will also create new jobs that revolve around tasks that still require a human touch. Rather than eliminating roles, Automation will redefine them.
The Blockchain is a public, digital ledger -- almost like a global spreadsheet -- that can be programmed to record everything of value. It has the potential to store information with unquestionable accuracy, which is why it was initially devised for the digital currency, Bitcoin. However, the Financial Services industry has recently been finding other uses for Blockchain technology.
The benefits of Blockchain technology for use within the Financial Services are plentiful:
It allows for fast and secure transactions
It reduces costs
It improves transparency
It's thanks to the above benefits that Santander U.K. recently became the first UK bank to introduce Blockchain technology for international payments. Referring to the new service, Chief Customer and Innovation Officer, Sigga Sigurdardottir told Bitcoin Magazine:
"The need for finance has evolved from providing a physical pound in your pocket or card in your purse, where you pay at a till, to being seamlessly integrated into a new, always on, connected lifestyle."
So, what does this mean for recruitment?
According to a survey conducted by TABB Group:
"89% of senior executives believe Blockchain will be in everyday use in the Financial Services industry by 2026."
However, the biggest challenge for companies set to implement Blockchain is a lack of human resources.70%of senior-level, global financial services decision makers agree that their organisations currently don't have enough talent capable of implementing Blockchain technology.
2017 is set to be a disruptive year in terms of technology trends for the Financial Services industry. If you want to plan your business growth for 2017 and beyond, contact our team of specialist consultants.