We’ve already seen the effects that technology has had on financial services, with 28% of businesses involved with banking and payments at risk by 2020. Technology-driven influencers are completely revolutionising the ways that financial services organisations work, with several processes being carried out digitally, and many more to follow suit in the future. However, because of the risks that technology-driven influencers place on financial services, platforms such as NEX are important to pay attention to, as they’ll assist financial services organisations with avoiding these disruptions and risks.
- The New Business Model Will Be Driven By FinTech
The word FinTech has been heard greatly within the financial services sector, and considering that so many businesses are at risk, it’s definitely something that shouldn’t be ignored. By 2020, up to 22 per cent of insurance, asset management and wealth management businesses are expected to be disrupted by the FinTech movement, putting many businesses and employees at risk of redundancy. The disrupters are often fast-moving companies, usually start-ups who have a particular focus on innovative technology and mobile payments, both of which are transforming the financial services industry massively. Whilst FinTech offers several benefits such as more efficient payments, 81% of banking CEOs are concerned about how rapid FinTech is expanding.
- Effects of Blockchain
Once again, the concept of blockchain has been heavily used within a large number of industries, with financial services being one of the most popular. However, despite its clear importance within the industry, a worrying 57% of people aren’t sure about how to respond to the sudden changes. For a start, the use of blockchain in the financial services industry could reduce the cost of the industry’s infrastructure, and secondly, it reaps numerous benefits from better financial transactions to automated contractual agreements.
- Advances in Robotics and AI
Robots have been used within the financial services sector for longer than you may have thought – simple ATMs are robots, as they provide consistent, convenient low-cost services for all customers. Robotics and AI are capable of many procedures within financial services, with cognition being one of them. Within the financial services market, robots can perceive, understand and plan in the real world, allowing them to work in dynamic and complex environments seamlessly, sometimes more so than humans. By 2020, we can expect to see even larger advancements in terms of robots and AI, such as underwriting in mature markets in particular, where data is readily available to them.
- Changes in the Infrastructure Model: Public Cloud
To make management within financial services easier, many financial institutions are now using cloud-based software applications for several processes, such as CRM, HR and financial accounting. This is reflected by the fact that 52 per cent of asset management CEOs believe that cloud computing will become a vital part of organisation strategy by 2020. By 2020, core service infrastructures in sections such as credit scoring and consumer payments will become utilities. With a cloud system, data storage costs have considerably decreased, as well as making ‘big data’ easier to manage and reducing barriers for new FinTech disrupters.
- Asia Will Become A Key Centre of Technology-Driven Innovation
China alone has the world’s largest P2P lending market, as well as more smartphone users than any other country in the world. These statistics alone prove how important China’s role in the technology-driven movement is. By 2020, the majority of China’s population is expected to become ‘middle class’, meaning that higher consumption of devices such as television and mobile phones is expected to increase. Recently, Asia has become the global leader in research and development, meaning that they have significant advantages to Western-based companies who are in need of technological innovation. Due to its wealth constraints and vast population, Asia represents the perfect fertile ground for disruptive innovation, which is imperative for the financial services industry to consider.