Why financial service firms need to embrace the tech revolution
With the global economy more interconnected than ever, the impact this is having on the financial services sector has been profound. Whether it is consumer banking, wealth management funds or international insurance firms, the need for these companies to operate quickly and reliably across borders has never been greater.
As a result, the technology solutions used by this sector has seen a huge jump in complexity in recent years. Since the financial crisis, companies are now required to keep much closer control of their records than in the past in order to meet strict new regulatory requirements. At the same time, new ways of doing business such as the mobile revolution and the greater availability of data means fast, reliable networking is a must.
Therefore, it’s no surprise that investment in technology in the financial services sector is on the rise. Figures from International Data Corporation predict overall IT spending in this industry is set to top $430 billion in 2014.
Reducing the risk
Of this, nearly a fifth will go towards solutions to assist with risk management operations, which is a top priority for financial services firms this year. And with good reason, as regulators around the world now impose much tighter controls on this industry, for everything from doing business with corrupt officials to irresponsible trading.
When it comes to monitoring transactions for potential corruption, for instance, there are several technology solutions that will need to come into play – all of which must be interconnected to stand a chance of success. Know your customer tools will have to be able to access the latest data – both internal and external – about who institutions are doing business with. These need to work alongside tools like big data solutions and databases that analyse and approve millions of transactions a day, looking for any unusual activity.
Putting the customer first
Offering customers the highest possible level of services will also be a priority for the industry that technology solutions stand well-placed to assist with. This is true whether an institution is offering everyday banking services for individual consumers or dealing with high-end wealth management clients.
It was recently noted by CNBC that “wealth-management firms will have to provide more services and adopt a more collaborative relationship with clients as automated websites and mobile trading provide self-directed investors with the tools to manage their own investments”.
This level of automation and collaboration will put large demands on traditional banking technology systems. Instead, firms will need to look at advanced, more reliable systems that are able to provide users with the ability to manage finances from wherever they are, in a way that suits them.
Similarly, in the consumer banking sector, the need for mobile tools to interact with each other and provide a consistent level of service will also be paramount. It was recently noted by Gartner that some institutions will end up having 20 or more apps available to users – which will lead to a quarter of leading banks looking to offer dedicated app stores for customers in order to organise these offerings.
These will not be able to work as effectively as possible in isolation, so interoperability will be a must. To find out more about how this can be achieved, visit www.intersystemspartner.co.uk.