Technology, such as video conferencing software, allows us to communicate effectively regardless of distance or location. This difficult period we find ourselves in where we have all had to adjust, will ultimately change the way we work in the future. Firms in the Financial Services sector have had to adapt to new technologies very quickly over the years and will continue to do so in order to stay ahead of the competition.
Technology empowering a new way of life
We've all quickly had to adjust to working from home and with everyone now unable to meet face to face, the norm has become virtual meetings. Even though we have been forced into social distancing and staying away from our friends, family and work colleagues, we are communicating just as efficiently via tools like Zoom, Houseparty and WhatsApp. People have adapted overnight and whether it's a quiz with your friends on a Friday night, recreating Greggs’ famous sausage rolls live on Instagram or a team drink after work, video conferencing has never been so popular.
I often think about what would have happened if this had occurred ten to fifteen years ago? It would have been very difficult for anyone to even do the most basic of tasks at work such as updating a group spreadsheet, so we all have to be very grateful for the advances in technology that mean our jobs can resemble some sort of normality. Virtual Reality headsets with full-face gesture capture and eye tracking, as well as the roll out of super fast 5G internet connections are ushering in immersive virtual face to face meetings without sacrificing the estimated 70% of non-verbal communication expressed in group meetings.
The digital revolution within Financial Services
The digital revolution has been around for a while, but more than ever is contributing to the way we do things. In financial services it's had a seismic shift with its impact on payments, retail banking and wealth management. People are now able to scan items in a supermarket and pay for them via their mobile phones, as well as managing their finances on apps. As a result, we have seen a significant rise in the number of roles from the large British Banks for multi-year digital transformation programmes in order to future proof themselves against the challengers and enhance their customers’ experience. A background in data analytics, new technologies such as blockchain or cloud solutions are usually desirable for these positions. Although the digital wave is yet to hit investment banking in the ways it has transformed other parts of financial services, we expect it to become more prominent in capital markets in the near future.
Projects focusing on cloud based solutions have become a key area for hiring for the banks, insurers and asset managers over the last few years. Many firms are using cloud based software as a service (SaaS) applications for core business processes such as HR, compliance and accounting. Experience in implementing tools such as Azure, AWS and Google Cloud is often required for these initiatives, where firms are looking to save money by automating these tasks.
Digital revolution brings risks
Malicious cyber actors are aware of the revolution and are capitalising on it at large. Cybercrime has emerged as a major concern for society and in particular its danger for UK financial services firms, rocketing security spend to the top of the technology investment agenda. This has been exacerbated by the rapid increase in the implementation of mobile technologies, cross border data exchanges and the use of third party vendors. We've therefore seen an increase in the number of project roles looking for candidates with strong experience in cyber security and IT security frameworks from a financial services background. This is a further reason why cloud solutions are in favour; by pooling operations with a cloud provider, SMEs can take advantage of superior IT security through the economies of scale provided by the likes of Azure, AWS and Google.
Artificial intelligence and Robotics have infiltrated the Financial Services market and firms are working with tech companies on how best to use the technology to streamline processes and maximise efficiency in a safe manner. We haven't seen many positions in this sector as much of the work is done in house in the banks innovation centres, but we expect that to change over the next few years as they move through their ongoing development cycle and onto the front line. Blockchain is another hot topic and firms are looking at ways it can be best utilised but there are certain barriers that need to be overcome before it can be used extensively. The regulatory implications, trust between firms and the complex technology are just some of the challenges that require addressing before it can become a prominent force in the financial services sector. With that in mind we shouldn’t overlook Blockchain’s potential, because if there's a collective effort and firms implement it into their infrastructure to speed up processes, automate tasks and ultimately cut costs, it has the potential to transform finance functions from a centralised to a decentralised point of authority.
Shifting towards Finance 2.0
Once we have overcome this very difficult period, an increasing number of firms will be looking at how they can utilise technology firms to maximise their output. Through over ten years of regulation, companies have had to constantly adapt and add to their infrastructure in order to meet the requirements of the governing bodies. These legacy systems are now outdated but leaders of businesses will be very hesitant to embark on big IT transformation projects in this current climate. In the future, this should change as firms move to a more agile platform, where change can be implemented more easily. By focusing their attention on long term solutions and the technologies mentioned above, they'll be able to become more efficient and stay ahead of the competition.
One thing we can say with certainty is that Finance 1.0 is about to change quite radically and this is the time for Fintech startups to step forward. As Finance 1.0 will no doubt be tested to breaking point over the next couple of years, all solutions must be on the table. We envisage that those with the skills to help Traditional Financial incumbents navigate a path to Finance 2.0 and learn how to leverage Open Finance will be in exceptionally high demand and in a good place to excel in these ever changing times.