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What does the future of Financial Services look like?

15 Aug 2019

Disruption continues to be the name of the game for financial services, with constant redefinition of roles and structures contributing to an industry that is rapidly advancing and innovating. Contributing £132 billion to the UK economy in 2018, the sector was the seventh-largest in the OECD by proportion of national economic output and featured 1.1 million jobs last year alone, making it a significant contributor to the nation’s employment and GDP figures. As the digital revolution continues to reshape the way we work, we can expect to see more change ahead for financial services. Here’s what the future the market might look like:

More focus on the cloud

Technological disruption is the most common theme we’ll see emerge in the future of financial services, with particular focus on how cloud technologies are being used by regulators and financial institutions. Recommended by Huw van Steenis in his review on the outlook for England’s financial system, embracing cloud technologies will only accelerate growth in the financial services market. It’s predicted that more than 40% of financial services may be cloud hosted within 10 years, so those organisations which shift from in-house storage to cloud environments now can get ahead of the curve. Benefits of doing so include faster innovation, enhanced cyber security, increased competition and greater resilience. More than half of asset management CEOs agree that cloud computing will become strategically important to their organisation, with SaaS proving popular for everything from security analytics to HR and financial accounting. While there have been security concerns surrounding the cloud in the past – the Nutmeg and Equifax data breaches attest to this – the key is to host protective technology on a highly secure platform, with the right training provided to staff to enhance security measures.

Cloud technologies are just one part of a wider digital transformation that are bringing with them new agility and innovation, and financial services industries should pay close attention to ongoing development here.

Financial literacy to move beyond the super-wealthy and well-do-to

As technology advances within the financial services space, so too does access to financial advice and wealth management tools. In line with this, we can expect to see financial services become more democratic in the future. This accessibility is predicted by Deloitte to be one of the top trends influencing how the industry develops, particularly as robo-advisors continue to make their mark. Services that were once time- and money-consuming will likely become commoditised through technology. Personal financial assessment and recommendations will be available to more than just the well-off and well-to-do, with investment portfolios able to be managed remotely by robo-advisors, opening up a world of financial literacy to people who have not had access to it before. Organisations such as OpenMoney are already making strides in this space by making financial advice simpler and more accessible to more people.

AI and automation will support specific human skillsets

Artificial intelligence is one of the biggest and most exciting technological developments in recent times, and the impact of machine learning and automation on financial services could be huge. As more and more data is collected and interpreted by machines, the flow of finance will become more efficient and accessible. This is supported by CHI & PwC’s Financial Services Q2 2019 survey results, which show that IT and technology-led transformation is the top business priority for the next six months. In turn, we can expect to see employers looking for new skillsets to complement technology-driven models, supporting a potentially leaner workforce with strategic use AI and automation. As such, those financial services professionals who embrace new technologies and consider ways of utilising them in their daily work are likely to see more opportunities than those who are resistant to change.

Facing up to climate change

The threat of climate change is a real concern for every industry and poses particular risks – and opportunities – to financial services. The Bank of England has proven to be a world leader in focusing on the financial risks of climate change, but we need to see more investors, lenders and insurers paying attention to how environmental changes might impact them and their customers. Financial markets must be able to price climate-related risks and opportunities, but not without the right information to hand. The Task Force on Climate-related Financial Disclosures is taking steps to address the risk climate change poses to the financial market, but it’s up to individual organisations to play their part too.

Financial services at IDEX

As an innovative recruitment and talent management consultancy, IDEX is proud to specialise in financial services now and into the future. We keep our finger on the pulse of all developments and can help you to make your move in this industry. View our latest financial services jobs here or contact us to start a conversation.

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