2017 – defined by Brexit, political unrest and economic uncertainty, was a tumultuous year for the financial industry. And while there’s no doubt that trade negotiations and pending regulations will continue to impact this year to come, it’s 2018 financial services technology trends that are tipped to be the primary driving force for change in finance companies.
Featuring the likes of robo-advisers, blockchain, the cloud and even bigger ‘big data’, here are five 2018 financial services technology trends set to transform and innovate the industry.
1. Investment in digital transformation
Never has the phrase “Digital or Die” rung more true for financial services marketing trends.
As consumer expectations shift further and further into digital realms, financial enterprises will become increasingly aware of the need to update and digitalize legacy platforms.
Compounded by the rise of digital-only players, sectors such as banking will offer a very visible manifestation of this financial industry trend. Globally, the past few years have seen digital banking trends carved out by the likes of Monzo, Moven, Simple, Ally, N26 and Neat (to name a few). Not only have such mobile-focused challenger banks gained market share, they’re constantly revolutionizing the way consumers engage with their banks. The convenience of opening accounts via a video message, applying for a credit card with an app or securing a business loan with a click or two of a button, has fundamentally changed demands placed on banking services.
And this year, this 2018 financial services technology trend is already picking up speed. In March 2018, two years after launching its key savings and loan services, the UK’s biggest digital-only bank Atom Bank (which currently has £1.3bn customer deposits and £1.2bn in loans to its name) announced that it had secured a £149m investment. This raised the Spanish bank’s UK share by just under 40% and has set the industry disruptor up for “further investment in technology and business capabilities.” Atom Bank, is clearly primed for the race for digital innovation and whether in banking, or other types of financial services, traditional models need to adapt to keep up.
2. User Experience Design takes center stage
As a result of 2018’s heavy investment in digital transformation, another of the emerging trends financial services will experience, is an increased focus on the world of UX design.
Highlighted in Synechron’s 2018 financial services technology trends report, 2017’s efforts to improve design thinking in regards to customer-connectivity will advance; combining immersive technologies such as VR and AR to improve customer experiences.
Focusing on customer-centric functionalities, new integrations of these technologies will bring more emphasis to a key area in financial services digital trends -“Creative Engineering”, to allow for the simplification and ease of digital processes (e.g. automated user interfaces).
3. Innovation: Blockchain, AI and Robo-advisers
Synechron’s 2018 financial services technology trends report also confirms industry suspicions that as in 2017, blockchain and AI will remain major disruptors across the financial sector.
In regards to blockchain, last year’s pilots move into the production phase and finance companies will start implementing new strategies and resources to effectively transition between these stages. The aim is to ensure platform setups are sufficiently optimized for the future rollout.
For AI, simple automation will give way to developments in Data Science and Cognitive Learning with Applied AI to advance AI activities across sales, marketing, trading, compliance and wealth management.
Wealth Management will be a particularly interesting area to watch in relation to trends in financial services marketing, as adoption of robo-advisers gains momentum. Business Insider Intelligence predicts robo-advisers will manage around 10% of all global assets under management (AUM) – worth a staggering $8 trillion by 2020. Notable big scale investment developments include Aviva’s continued profit from their majority stake in Wealthify and Munich-London based Scalable Capital, backed by BlackRock, has reached £600 million in assets under management and over 20,000 clients. As seen in the UK, banks are also investing in developing their own robo-advisers, with NatWest, Nationwide and HSBC all unveiling bespoke robo-advice services in 2018. 2018 is the year robotic tech keeps up with the industry’s pace and matures into a real weapon of growth for firms.
4. Privacy and big data finance
Whereas 2017 focused on data standardization, the 2018 financial services technology trend that will dominate data practices is the establishment of new infrastructures to compile with pending data privacy regulations and financial services regulatory trends; namely the EU’s General Data Protection Regulation (GDPR) and PSD II.
Firms will need to ensure legacy data architecture can keep up with big data getting even bigger when the volume of data required to adhere to privacy compliance expands from May 2018. Automated systems will be key here. The AI system at JP Morgan, for example, takes seconds to interpret 12,000 new commercial loan agreements every year – saving 360,000 hours of man hours. Such tech-first approaches are vital in processing and condensing big data finance regulations, such as GDPR, will force companies to scale up to.
Download Templafy’s free GDPR Guide and learn what the new regulation means for companies inside and outside of the EU:
5. The Cloud is everywhere
By 2020, experts predict that a corporate no-cloud policy will be equivalent to today’s no-internet policy. It is no surprise therefore that cloud adoption is a massive 2018 financial services technology trend.
BBVA research recently revealed that banks are largely utilizing cloud software for both non-core and non-mission critical uses such as HR and CRM, but this year open API will result in greater adoption of the cloud in relation to consumer applications. Middle and back office applications will also migrate to the cloud.
As with legal industries, this year will continue to have a big focus on security. With many cloud providers offering better, tighter security and regulation around financial data, businesses are forgoing previous hesitations around protection of sensitive data and embracing the cloud. Insights from Deloitte’s ‘Cloud Adoption in Financial Services’ research showcases this 2018 financial services technology trend with J.P Morgan’s plans to go live with its first two applications in the public cloud, and private cloud leveraging by the likes of Capital One.
Summarizing Deloitte’s key findings for financial service industry trends, Ranjit Bawa, principal and Deloitte U.S. technology cloud leader of Deloitte Consulting LLP stated: “Many vendors are actively addressing traditional roadblocks to FSI adoption of cloud applications. These moves can enable financial services companies to deliver faster, cheaper, and more powerful technology products and services that meet the requirements of regulators while also better serving the needs of their customers.”
Download Templafy’s free Office 365 Implementation Guide and see how Office 365 can make it easier for your organization to create, communicate and share information in the cloud:
How can Templafy keep your business on trend for 2018’s financial services trends?
Templafy is designed to enable businesses to capitalize on the 2018 financial services technology trends discussed. Below are just a few benefits of our cloud-based software:
● Security: Templafy is hosted on Microsoft’s Azure cloud service and is GDPR compliant, storing minimal client and employee data. Our solution is also regularly and rigorously tested to ensure that all data is saved in a secure place while still protecting sensitive information.
● Document control: Particularly useful post May 2018 – when data volumes multiply with the implementation of GDPR regulations, our cloud-based system centrally manages templates, helping keep track of how files are being used. Information is more readily at hand and easily retrievable.
● Legal compliance: Templafy can automatically include your company’s most up-to-date legal disclaimers in all emails and documents. How does this work? Compliance managers can upload text changes to legal disclaimers and other reusable text elements via a centralized admin dashboard, with filtered use for the appropriate department or employee and it can be rolled out immediately without help from the IT team.
● Easy access: All programs can be accessed through a web browser without the need for VPNs or remote desktop sessions so there’s no need to download applications to your computer, physical hardware is a thing of the past and importantly document templates can be accessed anywhere, online and offline.
● Productivity everywhere: As well as allowing employees to work from any location, the cloud has many workforce productivity benefits. For instance, a 2016 US study found 91% of remote workers felt more productive at home than in an office environment and a Chinese study found working from home can add an extra working day of increased productivity. Arming your team with the right tools to work from home goes hand in hand with supercharging workplace productivity.
● Scalability: The cloud’s services are elastic so if your business needs fluctuate, scaling both up and down is no hassle at all. You’ll also only pay for the space that you need and have much needed flexibility for 2018’s unpredictable markets.
● Brand Management: Manually managing branded documents can be an incredibly time-consuming and frustrating task. By automating pre-branded document template management and giving employees access to centralized brand asset libraries and best practice text elements, Templafy allows workers to focus on what they were hired to do, rather than spending time checking work adheres to the latest corporate guidelines.