By Alice Kelly, Head of Research and Production, CeFPro
Financial services, alongside a whole host of industries is undergoing rapid change and advances in offerings. Institutions have been pushed towards a continuous loop of innovation, emerging trends and technology advances, increasing pressures on institutions to keep up with the pace of change. As more buzzwords continue to emerge institutions grapple with separating hype from practical solutions. The opportunities that this innovation loop creates are endless for those willing to advance. As institutions continue to develop and implement change and understand the possibilities of some emerging trends, it is more important than ever to advance conceptual knowledge in order to keep up.
With this in mind, CeFPro have conducted an extensive research project in order to produce a two-day, three stream event that offers insight into new technology offerings, understanding evolving customer expectations and leveraging innovation as a tool to stay ahead of competition. The two-day event provides the opportunity to network with financial institutions, FinTech companies, solution providers, regulators, investors and many more to connect the ecosystem and share knowledge. To support the launch of the event CeFPro will release a two-part blog focusing on the main aspects of the research, the below looks into FinTech and Emerging Technology.
One of the largest topics highlighted by industry experts throughout the research was that of collaboration between FinTechs and financial institutions and the opportunities these collaborations could have for institutions. FinTech technology looks to revolutionise the financial services industry, with increased collaboration, large institutions can leverage the nimble nature of startups to enhance their offerings. As will be featured in part two of the series, customer expectations are rapidly evolving, and therefore product offerings must keep up with this change, FinTechs can provide the opportunity for rapid change in offerings to modernise traditional institutions. With a new wave of millennials increasing reliance in technology and interactions changing from face or voice to screen and online, development of mobile apps and agile processes are more important than ever. The industry is seeing an increased collaboration between financial institutions and FinTech companies, with the example of Goldman Sachs and Apple Pay collaboration, a traditional institution leveraged the chance to modernise and innovate by aligning with a ‘FinTech’. Alongside the opportunities to larger financial institutions, comes the opportunities to far smaller FinTechs who may otherwise not have the resources to develop their offering. Collaborating with a legacy institution allows them to leverage the branding of the company and provide their service to customers familiar with the company culture and product quality. Aligning cultures between the two institutions can provide hurdles on both sides with having the two co-exist under one unified system. Challenges and opportunities range from onboarding of customers, data gathering, regulatory compliance and developing a collaborative culture.
Aligned with the aforementioned topic of collaboration, comes the organisational setup and alignment when merging an agile FinTech with a complex legacy institution. Aligning with a legacy institution can create a host of opportunities, but also make a small FinTech subject to strong regulatory scrutiny and corporate culture and hierarchy. It is important for FinTech companies to remain a separate entity and retain their identity whilst merging with a legacy institution and merging governance and processes. A hierarchy, governance structure and accountability must be determined in order to move forward and implement change. Alignment of the two types of institutions can be problematic, but done successfully provides both institutions an opportunity for growth, to capture new markets and offer new and innovative products.
The future of financial services remains uncertain, with technology today embedded into the core of a company that couldn’t be imagines 10 years ago, understanding what the next decade has in store is an exciting and daunting prospect. Many institutions remain cautious of the change, and reluctant to be the first out of the gates for fear of the unknown. What remains clear however is that traditional banking and financial services products as we know them are changing, and rapidly. It is more important than ever to be in front of competition, to become as agile as possible and efficient as possible. With customer expectations and trends constantly evolving, it is a race to keep up and stay ahead.
Join us at X-Tech 2019: Financial Services and Technology to explore the above and much more! Connect with colleagues, peers, regulators, FinTechs companies, investors, academics and influencers driving innovation. Hear practical case studies and lessons learnt on how your institution can innovate, leverage opportunities and stay ahead of the curve.
We hope to see you there to innovate and advance the industry together!