On Tuesday 7th July, many of our community members from Financial Services organisations came together for the inaugural Industry-Sector Think Tank. Four round tables of C-level executives from the UK’s leading FTSE and SME companies discussed the challenges and the solutions of where digital sits in their given sector.
The discussion was led by leading experts from Head London, Atos, and Kcom. The breakfast took place at London’s Living Room, on the top floor of City Hall, with spectacular views of The Thames.
The round tables engaged in lively and collaborative conversations about a variety of topics, including:
- How can Big Data provide the greatest opportunity for financial services and for customers?
- Cyber-security and authenticating customer identities in a digital world.
- Integrating innovative new digital tools into a complex legacy infrastructure.
- The challenge of developing an innovative, entrepreneurial culture, whilst balancing the formal disciplines of regulation and a need for ROI from investors.
- Creating engaging experiences and interactions with customers.
- What types of skills needed to deliver on digital ambitions, where they come from and what will make them want to stay?
The Nimbus Ninety Benchmarking Survey gave insight on where Financial Services in particular is suffering from a lack of development into digital. However, burgeoning new trends have emerged from Financial Services organisations finally harnessing digital to their advantage.
The biggest impact so far for Financial Services has been through big data and analytics. These two combined have provided the tools of insight to a customer’s financial dealings – where they spend, how much is going in vs. how much is going out, determining insurance premiums and more.
Though Financial Services has been fully embracing the use of data in recent years, as a sector they are still hindered by tradition: through both legacy systems, and outdated modes of thought. Digital disruption is taking over – like it or not.
So where does Financial Services go from here?
The round-table discussions illustrated that Financial Services must move towards making digital disruption work to it’s greatest advantage, while keeping in mind that it will also be used to great disadvantage when it is in the wrong hands. Recent headlines of hacking scandals, identity theft, and the rise and fall (and rise again) of e-trading and cryptocurrency have shown us some of the pitfalls of digital disruption – that is, those that we know about.
Digital is allowing financial institutions to serve customers better and more efficiently than ever before. From the in-depth conversations, we were able to not only answer questions, but to raise new ones, including:
- Users are the ones demanding new tech, but with limits, depending on who the consumer is – many of the older generation (who, for some Financial Services institutions, are the bulk of their clients) abhor digital and prefer paper ledgers. However, these customers will start phasing out , and are already outnumbered by those who are comfortable with, and even demand digital tools. So, how do we handle this transition?
- We must also ask what client experience we wish to aim for – should we use omni-channel, or distinguish services such as calls/browser experience/mobile? Should multi-device experiences be seamless – logging in on one device, making a payment on another, and looking at product offerings on yet another?
- There is also the question of using different facets for various customer experiences – such as for VIP customers, loyalty programs, P2P pay services, current accounts, etc.
- Security poses ongoing challenges, and the answers are not simple. For instance, when Biometrics is used for authorisation, once they are compromised, they are compromised forever – after all, we can’t change our DNA or our fingerprints. So what is the solution? Does an all-encompassing solution exist, or must Financial Services simply deal with each new security challenge as they develop?
- What are the cultural considerations, and appropriate skillsets needed for a successful digital organisation?
As decades of legacy systems need to be unravelled, digital leaders in Financial Services must consider a multi-levelled strategy for combating the digital revolution emerging in their sector. This is comprised of several steps:
- Acknowledging that a 2-pronged approach must be used when approaching security - first, more complex systems that are harder to compromise, along with constant and diligent monitoring for intrusions.
- Though strict regulation is often an impediment to digital development, Financial Services organisations must reorganise for digital, rather that the other way around. Organisations must make the decision - do they wish to be a bank with a digital arm, or a digital organisation with a banking licence?
- Skill-sets must be shaped for employees and clients alike.
- The digital revolution is not a choice, but rather an eventuality. Centuries-old institutions will be facing VC funded start-ups and digital giants in the financial sector, who are not hindered by tradition nor regulation. It is vital to prepare now, with ongoing and customer-serving digital innovation, to be prepared for this digital revolution.
Financial Services has been known to be reluctant when it came to embracing digital. This, along with the snowballing of innovation in other sectors, could mean that the transformation will only prove to be more formidable - the longer an organisation hesitates to embrace cutting edge digital innovation, the more difficult it will become to remain competitive.