Financial services have been key to shaping the modern world. In the past decade, financial institutions have changed fundamentally, cutting workforces and offshoring. New technologies are driving change. As a result, the industry is set to experience significant disruption. The future is digital.
Automation, artificial intelligence (AI) and the cloud are changing the face of financial services. While many financial services firms still grapple with how to adapt, the changes are accelerating. Those that can respond to these changes are poised to define the financial services industry of the future.
In this era, consumers will demand human-centered experiences. This means firms will need to make their services available at the time and place that consumers want. They will also need to provide personalized, meaningful interactions. To ensure that they are serving their customers well, firms will need to invest in automation, AI-powered CRM, self-service tools, digital marketing and employee engagement.
Financial services companies can also use their existing capabilities to help address societal challenges. One example is banking-as-a-service, which allows banks to offer a wide range of financial products and services through an online portal. Another is robo-advisory, which enables customers to manage their money without any advice.
Financial institutions are transforming into more human-centric ecosystems. The new ecosystem will enable financial services players to deliver more personalized and efficient transactions. Similarly, new actors will emerge to drive transformation. These include start-ups, fintechs, digital giants and a variety of other players. Each will bring a different set of strengths and risks.
To compete with these new players, firms will need to restructure their operating platform and build a strong foundation of customer-centric technology. The ability to serve customers in micromoments and to create microcontent will be essential. At the same time, firms will need to improve their data and analytics environments. It is also important to develop an effective governance model in the new era.
As the financial services industry continues to shift towards digital platforms, the industry will also have to deal with increasing regulatory costs and increased offshoring. Additionally, the low interest rate environment has created major behavioral changes in the workforce. Consumers will also become more sophisticated. Therefore, the focus will increasingly turn to financial performance, complete and accurate reporting and ESG.
This ongoing transformation will create a new era for the financial services industry. In the coming years, it will be essential for firms to amplify their roles to accelerate human-centric ecosystems that reshape the economy. However, the nature of this transformation remains unknown. Until then, these organizations must learn to meet the needs of their customers and address their societal challenges.
The financial services industry of the future will be driven by new technologies, a focus on real-time data and a move towards microcontent. A new model for financial service offerings will rely on APIs, or application programming interfaces, to enable customized financial applications. Also, APIs will enable greater interconnectivity between the financial ecosystem.
Financial services institutions will also need to develop effective governance in the new era. This will require building multidisciplinary teams that have a deep understanding of the business and the experience. Furthermore, financial services firms must also have a firm grasp on their customers and their patterns. They will also need to consider whether they are able to develop effective partnerships with ecosystem orchestrators.
