Change doesn’t come quickly in a highly regulated industry like finance, does it?In fact, change does come fast, and it will be coming shortly to a bank near you.
Regulation serves as a bulwark serving consumer needs and protecting their interests. It doesn’t guarantee that consumers will continue to need the services of banks and other financial institutions.
The fact that a transformative, world-changing financial technology has not upended the global finance system today does not guarantee that it won’t do so tomorrow.
In fact, we are closer than ever to that day because, for some, that technology already has a name: blockchain.
Keeping your finance sector firm above the water in a market increasingly dominated by innovative technology solutions and blockchain-based cryptocurrencies might be the greatest challenge the industry faces this century.
Where is the Finance Industry Going?
Finance, like many other industries, is becoming increasingly accessible. Where the very first modern banking institutions in Renaissance Italy exclusively served the needs of the era’s wealthiest individuals, today’s systems are focusing increasingly on the financial needs of the less affluent masses.
This is something to be expected at the intersection of technology and finance, where exclusivity is rarely as lucrative as accessibility can be. The success of M-Pesa in Kenya is a surprisingly poignant example of how clever FinTech solutions can derive value from accessibility and omnipresence.
Global tech firms already have an eye on M-Pesa’s success and are moving into consolidate positions of power in the finance world.
- Amazon Web Services provides infrastructure services to a broad range of finance companies, including Capital One, Carlyle, Nasdaq, and Stripe.
- Capital One and Liberty Mutual have implemented voice-activated personal assistance through Amazon Alexa.
- Brazil’s Banco Bradesco offers its full suite of banking services directly from an integrated Facebook app, targeting users by harnessing customer data analytics.
It is easy to see a trend occurring. Tech firms are encroaching on the world of finance in partnership with existing institutions to offer customers easier access to better services. They are positioning themselves to offer what every financial service firm will need to provide in the near future – a robust data platform, the ability to forecast financial trends, and high-quality analysis tools.
What Financial Firms Need to Do
The first thing financial firms need to do is look at their manual processes. Identify your most time-consuming and laborious processes and find ways to automate them using modern technologies. This is the first step towards protecting yourself from financial options that can undermine established financial institutions‘ need to pay overhead.
Then, look into the strategies of the world’s biggest tech companies to see how they are moving closer to FinTech and develop a strategy for making your organization technologically relevant. By building on a foundation of accessibility and ease of use, you can use technology to ensure your organization retains its value even among the disruptive developments of tomorrow’s financial world.
Contact App Maisters for resources and expertise on developing cutting-edge technologies for the financial industry.