A recent Accenture report estimated that investment in fintech companies globally topped $19 billion (€17 billion) last year. That number, they said, was expected to double this year.
The burgeoning fintech sector is supported by both private and public interests, with many national governments, including our own, acknowledging its potential value to national economies.
"Tech is driving the financial industry," explains Eoin Christian, managing director at Grenke Invoice Finance.
“Investment is currently being made into setting up the foundations for the digital platforms that finance will be acquired on in the future.
“On a day-to-day basis, if you’re not already web-based and app-based, you’re going to get left behind,” adds Christian. Remote access “Standard banking has, thus far, pushed consumer technology advancements. Consumer banking has been driven by remote access to funds, and the removal of physical branches where possible around the country. Now business banking must follow suit.”
Consumers today are more digitally connected than ever before with technology radically changing the way we engage and interact with products and services, as well as the companies behind them.
It is taken for granted that our service providers offer one- to-one personalisation and seamless customer service, 24 hours a day. So why would the financial services sector be considered any different?
“Today, customers are demanding transparent, smart, and simple provider relationships. They want a consistent experience that is easier, quicker, more user-friendly and mobile.
Customer experience “As a result, the financial services industry is being transformed by technology-led innovations like peer-to-peer models, crowdfunding and payments.
"Fintech start-ups are shaking up the industry through innovation, speed, and great customer experience and are forcing well-established financial services businesses to transform quickly."
Firms such as Crowdcube – the pioneering investment crowdfunding platform – and CurrencyFair, an online peer-to-peer currency exchange marketplace are two examples of the growing number of fintech companies determined to disrupt the industry.
As this current wave of innovation continues to gain momentum, it is imperative that information and data held by financial service providers be shared within departments, across the organisation.
"Success lies in having an understanding of your customer," says Sanj Bhayro, senior vice president, EMEA commercial sales at Salesforce. "To do this you have to have all functions of the business talking to each other. Traditionally, information and data was very much held in department silos but to truly maximise customer experience, it's crucial that the rich data that each department has at its fingertips is shared.
“While legacy adviser solutions were created decades ago to serve a product-centric world, today’s solutions are about bringing companies closer to their customers,” says Bhayro.
“Using cloud technologies, IT is able to break down the information silos, sharing information across departments and giving companies a new level of understanding and insight into their customers and their needs. With this information, companies are better positioned to create a connected experience across all aspects of the business be it in branch, online or even on mobile.”
Game changer The other potential game changer for financial services into the future is blockchain – the technology underpinning bitcoin and all other cryptocurrencies. Its potential as a secure digital ledger for data storage is naturally of great interest for an industry where customer trust is paramount. "Blockchain is being hailed as a technology that will create an 'internet of value', in which exchanging value will be as simple as exchanging information," explains Brian Delahunty, head of product and business development Barclays Bank Ireland.
“It is expected to revolutionise the back-end operations in the financial services sector, especially the global payments landscape.”
While the technology has been touted as a potential alternative for voting, intellectual property, legal databases, leasing contracts etc, in the short term it will be the financial sector that uses it most.
"For us the blockchain has the potential to radically overhaul how things are done and impact core parts of infrastructure, banking, insurance, capital markets etc," says David Dalton, partner, strategy and operations, consulting at Deloitte.
“We have already completed over 25 proof of concepts, in a variety of separate use cases for blockchain technology.” Artificial intelligence Other trends likely to become mainstream in the coming years include e-signatures, trade invoicing, peer-to-peer financing as well as robotics process automation and robo advisers, who can provide investment advice, based on a mix of automation and artificial intelligence.
“These types of innovations no longer hold simple novelty value,” says Christian. “They are key if banks are going to be able to compete into the future.”
