2018 is set to be an interesting year for financial services. In making our predictions for the coming year three themes stand out: regulation, transformation and conversation.
We discuss these key themes and what they mean for your 2018 strategy.
“MiFID II and GDPR will bring radical change, but firms will adapt and once the dust has settled, the foundations are laid for new practices. In the shake-out we expect a new global benchmark to emerge and it will be interesting to watch where and when it emerges.”
Andrew Walsh, CEO - IRESS
RegTech - a problem solved?
Increasing regulatory obligations means the cost of compliance is typically escalating by more than 10% a year for firms. RegTech (regulation technology) is answering a massive need to control costs and introduce efficiencies, little wonder that its application in financial services is accelerating as firms look to technology to solve the challenges of regulatory compliance.
“The pace of technological change is set to accelerate over the next decade and there will be massive distraction risks. The advisers who succeed in this new complex environment will be the ones who understand the impact of major trends such as data, digital and mobile advice. But above all, it will be the advisers who avoid the distraction of exciting new tech tools and focus on aligning technology closely to their business models.”
Andrew Walsh, CEO - IRESS
Big data will be big business
Data has become a vital currency in our digital world. In 2017 the big data industry overtook oil as the world’s most valuable traded commodity. Predictions that more than 40 Zettabytes (or 40 trillion gigabytes) of digital data will be generated by 2020 indicate it’s not slowing down any time soon. As personal data becomes harder to earn, it becomes a key asset for competitive advantage.
“The focus on advice and client data management will continue in 2018. With more data being more accessible and algorithms becoming increasingly sophisticated, solutions that produce insights and decisions from data patterns will be increasingly commonplace. This will propel machine learning to new heights and deliver real AI.”
Aaron Knowles, Group Executive, Product - IRESS
Will this be Blockchain and Bitcoin’s year?
With significant potential to remove friction from processes, Blockchain could be transformational in saving time and costs across the financial services industry. As blockchain reaches a level of maturity and crypto currencies unlock greater efficiencies, 2018 could be a pivotal year for this fintech.
“We’ll see greater application of Blockchain in areas like securities exchanges where it will be used to optimise the trade settlement process, reconcilliation and compliance processes, creating better user experiences and efficiency. More players will leverage integrations with financial trading products into digital currency exchanges and, with crypto currencies accepted as a viable asset class, smart contracts will be the next to take off.”
Andrew Todd, CTO - IRESS
The rise of hybrid planning
As clients seek more options and flexibility, advisers have been busily adapting and evolving their offering to service this changing demand. Supporting a good user experience and consistent advice across multiple channels means the right architecture becomes essential. Advisers will not want to be using disparate tools or multiple stand-alone applications but seamless technology that supports effective and efficient client engagement.
The Outlook for 2018
New regulation and advances in technology means 2018 will be a transformative year for financial services. The challenge will be to not get distracted by it. Have a clear vision on where you want to go in 2018 (and beyond), then use the right technology to get you there.