A combination of the rapidly changing technological landscape, the proliferation of challenger banks and fintech start-ups, and of course, the ongoing situation with COVID-19, has meant that many financial services companies have had a turbulent few years. More and more financial companies are opening their eyes to non-traditional business models and working scenarios; and it looks like the next few years are going to be ones of even more tech-driven disruption within the sector. IT support for financial services is becoming increasingly centred around solutions that make businesses more resilient to rapid changes to the industry, business environments, and markets. Business agility has always been a highly desirable quality, and with the digitalization of society and business, the road to business agility is becoming more interlinked with IT.
There are a number of IT-driven trends that are emerging within the financial services sector, influenced by a number of things. Of course, the ongoing COVID-19 situation is a factor; other factors include the increase in the number of customers wanting instant access to services. Another important factor is the sheer amount of data being created by users all the time.
So, how exactly is the proliferation of IT influencing the financial services sector?
The Cloud has been a highly disruptive technology in the last decade. The ability to store and access data from anywhere, as well as the ability to make compute resources available over a network, has played a big part in the direction that IT is going. Even before the COVID-19 pandemic, many banks and financial services companies were in the process of migrating to the Cloud – but there has been considerable acceleration in the move to the Cloud since the pandemic.
The benefits of moving to the Cloud are many and diverse. To start with, the Cloud makes it much easier for businesses to scale their services and their infrastructure. In a time where customers are demanding new digital services, and better security for their money and data, the Cloud is a valuable solution. Cloud environments make it much easier for companies to experiment with new technologies and solution – it is a flexible platform that naturally promotes collaboration, and the lifecycle of developing and deploying new services becomes much quicker when using the Cloud, which offers a lot of value for financial companies.
AI and Machine Learning
Artificial intelligence is one of the most rapidly growing fields of technology used in business; and the financial services sector were quick to adopt and start implementing it. There are many benefits of AI for this sector. For instance, AI is excellent for automating repetitive process, and this application is growing all the time – many tech leaders are expecting the automation capabilities of AI to extend to company-wide processes and complex, interlinking workflows. This is a huge advantage for businesses, but especially for financial companies, who rely on having agile processes, and being able to focus as much of their resources on high-value tasks as possible.
Other applications of AI and machine learning include risk assessment. The importance of data in today’s digital business landscape cannot be understated. Machine learning can be used to process and analyse Big Data, to reveal highly accurated insights that make prediction modelling much more accurate. In this way, financial services companies need AI to perform more accurate risks assessments.
A lot of the emerging technologies that we are seeing implemented in the financial services sector have largely been applied in the back-end of business – enabling them to improve and optimize various processes, or else experiment with new approaches. But there is a definite shift towards companies deploying these types of technology to create solutions designed for the customer experience.
Banking apps have become commonplace among consumers, and it is highly likely that we will see a boom in the capabilities of banking and other financial apps, as companies begin to apply more cutting edge technologies into their customer facing services.