Trends That Will Impact the Finance Industry 2019 – 2020 and Beyond
It is undeniable that the pace of technological advancement is the major force behind the changes happening in the global financial services industry (FSI). Financial institutions are left with no choice but to adapt their business models accordingly to remain competitive in the markets they operate.
FSI outlook reports for 2019 to 2020 and beyond by various top financial consulting firms in the world, PwC , Cooper Parry and Deloitte, show that FinTech, digitization of operations, data analytics, client self-service, and blockchain are the most likely sources of disruptions in the financial services industry over the next two years. This article captures the real-world implications of these changes and provides insight on how organizations can prepare to win in the increasingly dynamic playing field.
FinTech to Steer the new Business Model
Today, there is nothing more disruptive in finance than FinTech. Using service-oriented innovative technology, FinTech start-ups have finally become the unopposable tools for breaking into financial services. A recent Global FinTech Survey by PwC showed that traditional players are worried of losing about 25% of their business to standalone FinTech start-ups within the next 5 years.
In a smart move to remain competent in the industry, incumbents are smartly embracing disruptions. Large to small financial institutions have come to the realization that it is no longer about integrating technology into business operations but using financial technology as a central facet of new business models.
Analytics: Key Decision-making Tool
Data has never been more critical to businesses like it is today. Data analytics combined with artificial intelligence and machine learning will be key technological trendsetters for the financial services industry in 2019 and beyond.
Business analytics is continually becoming an essential tool for truly transforming financial institutions into data-driven organizations. Financial institutions are expected to invest in technologies surrounding data analytics to realize the massive power of data on hand and that which they can collect (big data). 2019 and 2020 will therefore witness massive increase in data utilization by these institutions. Even institutions that offer products for Forex trading for beginners are keen to use advanced data utilization technologies to ensure that their customers are able to make profitable Forex trades from the onset of their careers.
Retail banking, payments, insurance, and wealth management are areas in which digitization of operations is already taking place at great lengths industry-wide. With internet development and continuous technological advancement, financial institutions are putting more investments into digitization of more and more business operations to achieve more efficiency.
The e-commerce way of doing things has become the new normal in financial services. This is evidenced by the tendency by financial organizations to transform traditional operational units into e-business units. This trend has also caught pace in financial regulatory institutions.
Shift to Client Self-service and Increasing Value of Customer Intelligence
Delivering superior client experience is one of the major competition grounds for banks, insurance companies and investment management firms. Every other day, these organizations are looking for new technologies to provide more relevant services to their clients and in the most seamless ways. Self-service platforms are especially growing in popularity.
As services become digitized, financial institutions are keen to provide technology-based solutions that add value and enhance client experience. It is no longer just increase the number of self-service functionalities.
Of critical importance is making sure that technological capabilities being developed are customer-intelligent. Customer intelligence deals with how an organization interacts with its customer as it seeks to meet the client’s needs. Being customer intelligent is a key trend that will potentially drive FSI revenue and profitability going forward.
Blockchain Will Become an Integral Part of Financial Institutions
Just recently, one of the world’s biggest banks, HSBC, reported how using a blockchain-based system enabled it to make significant cost savings on Forex transactions. It is evident that blockchain has started shaking things up in financial services. There is a surge in funding and innovation in FinTech and blockchain. There are convincing signs that the use of blockchain is likely to become a crucial part of financial institutions’ operational and technological infrastructure.
Adaptability: How to Win in Financial Services
Future winners in FSI are institutions that can envision and execute initiatives at a faster pace than the speed of change. The institution must have an evolving mindset and culture to enable it acquire the right talent and capabilities that will help to develop flexibility and innovativeness. It must also be prepared to invest adequately in securing its brand as a technology leader among its competitors. This is the only way to gain sustainable growth in the increasingly digital future.