Last year saw businesses across various industries struggle with trying to balance keeping up with emerging technologies and spending money in the right places, all whilst fending off rapidly evolving cybersecurity threats.
This was especially prevalent in the financial services sector as businesses had to adapt to keep up with competition from disruptive fintech companies as well as having to change the nature of their work to become more strategic about technology such as automation.
Learning from the challenges of last year, the financial services sector will need to become more agile and companies must begin to prioritise values such as experimentation, collaboration and communications. However I believe very few companies will become truly agile in the next 12 months.
Digital transformation was the buzzword of 2018, with many companies talking about it; however not many actually embraced change. If businesses are to keep up with those who are already using these emerging technologies, then digital transformation must be at the top of the list for business leaders.
Multi-cloud and automation are set to be game changers for the financial sector as these will allow companies to become more agile. Currently, the complexity of cloud regulatory systems and concerns associated with these are slowing financial service institutions down and discouraging interest in creating digital banks.
However, using multiple public and private clouds can help mitigate risks and provide services such as back-up and disaster recovery. Likewise, a renewed focus on automation will allow companies to increase efficiency by optimising their back office. This will be paired with an increase focus on cyber-resilience, and more organisations make cybersecurity a boardroom issue.
Unlike blockchain technology that has a long-term growth trajectory and is still waiting to go mainstream, the move to the cloud and desire to automate processes will be top-of-mind for business leaders this year.
This will prompt a much-needed cultural change within many organisations, who will look to employ people that have the right skill set to implement these technologies and are capable of responding to any further challenges.
Getting industrial with automation
With the latest CBI/PwC Financial Services Survey reporting that British banks have suffered their first drop in demand for five years, it is clearly vital that banks need to reinvent themselves. Fujitsu’s own research of UK financial services leaders showed that half believe banks will not exist in their current form in a decade, with an overwhelming 95 percent believing technology is key to driving these organisations forward.
All banks have at least experimented to some extent with automation, and some of them have registered remarkable results in workforce productivity, operational efficiency and in driving business growth. However, banks need to be take automation to the next level and begin to get industrial with automation.
In order for organisations to take advantage of the benefits of automation, they must change their approach. Often, implementation can be disjointed and decentralised in a way that leads to the dilution of benefits, with only few employees actually recognising the value.
Our experience shows that firms first need to focus on a rapid, industrialised approach to automation of current processes and then introduce the “intelligent” aspect of automation. Companies will see a significant difference in the effect that automation has on their business.
Organisations also need to move away from the public fear of automation. All too often, sceptics and critics equate automation with a loss of jobs. However, it is important to remember that whilst some roles will disappear, many will surface in their place.
Automation will not only replace existing manual processes, it will also create new ways of doing things, which will create new value for businesses and their customers. For example, given the drive towards efficiency and agility, we can expect a lot of jobs to be created in the areas of automation, with more people employed to develop and implement AI-based automation solutions. Business must focus on these positives when considering automation.
Multi-cloud environments gain popularity
Challenges for financial services organisations have been characterised by legacy systems and attempts to digitalise. The majority of financial services organisations have at least tried to migrate to the cloud but have often faced problems due to a decentralised approach. All too often, there is a lack of communication between departments that causes the benefits of cloud to be buried under formalities and unnecessary complications.
A hybrid and multi-cloud strategy presents a solution to these problems. It allows organisations to deploy both public and private cloud performs for different applications and resources, therefore streamlining the process and reducing single points of failure.
The popularity of multi-cloud environments will increase this year as more IT leaders find it enables them to deploy applications and workloads in the environment that best suits their individual requirements for compliance, flexibility and simplicity. As more organisations use multi-cloud platforms, there will be a shift to simplify the strategy, giving further access to more businesses.
Cyber-resilience becomes a priority
The sensitivity and scale of data that the financial services industry holds means that it is a prime target for hackers, and businesses therefore must ensure that they are protected against attacks.
This fear has called the nature of cloud into question, with regulators wary of banks keeping all their assets in one cloud server that could be susceptible to an outage or breach. The multi-cloud approach previously mentioned does protect to some extent against this, but there are also other measures that organisations must take to protect themselves.
Cyber-resilience will become a common trend for businesses this year. Financial services firms can add to their resilience by providing services in more secure ways. Many have already rolled out biometrics and multi-authentication security methods, but this year we will see a renewed focus with technology such as palm vein authentication.
Simultaneously, due to the nature of today’s connected world, if your customers’ assets are at risk, your assets are at risk too. The number one way in for a cyber-attacker is still a phishing email. Educating employees and customers on how to identify phishing emails will help to combat this form of cyber attack. As a result, we’re likely to see more banks invest in guiding both business owners and the general public how to protect themselves from cybercriminals.
The financial services industry is set to change, adapt and innovate this year. Emerging technologies will be at the centre of business plans as organisations seek to further deploy automation and multi-cloud platforms.
As well as aiding innovation, these technologies will also feed into a focus around the importance of cybersecurity. There has already been a huge amount of disruption in the financial services sector, and 2019 will be no different.