In the Fintech Fast Five, we ask industry insiders five of the pressing questions facing the sector. In the firing line this week is Tony Clark, Managing Director at Synechron…
1. What fintech will have the biggest impact in 2019, and why?
While over the past few years individual technologies like chatbots, blockchain, and AI have each seen popularity as the major technology of the year, we believe that 2019 will not have a single technology leading the charge in 2019. Instead, we expect 2019 to be the year when multiple emerging technologies are combined to create powerful, exponential value add to financial institutions.
Think blockchain, plus machine learning, plus the ‘Internet of Things‘ and cloud combined. 2019 will be the year that businesses focus on progressing major enterprise scale digital transformation strategies and to do so will require combining a change management initiative combined with multiple technology solutions.
2. How can you encourage the mass adoption of Fintech?
When we consult clients on how to adopt fintech solutions, we always start by asking what is the business problem you’re trying to solve. Understanding the business challenges, the gap in the current technology infrastructure with the future target state and having a clear roadmap to close that gap all help to identify the right opportunity for a fintech to that has a proven, industry-leading solution to come in and close that gap. Where there is not already an industry-leading, trusted solution, this can be an opportunity for businesses to innovate and find differentiated value through home-grown fintech solutions or even by purchasing a market leader as we have seen many banks doing over the last two to three years.
3. Are legacy institutions agile enough to keep pace with changing demands/innovations?
Banks, financial institutions and insurance companies are all at various stages of maturity when it comes to upgrading their infrastructure and employing agile development to achieve their digital transformation agendas. We consult with these firms to advise them on the best approach to update their infrastructure. In some cases, this may include creating a User Interface (UI)-layer over the legacy infrastructure as is it updated incrementally. In others, we are working with clients to move from .net to java or change to a microservices architecture that will allow them more flexibility for implementations.
The more advanced firms are focused on implementing agile working methods across business lines at an enterprise scale, and while technology is a big part of the conversation, the largest barrier here is ways of working and cultural change within the organisation. No matter where a firm is on this maturity curve, there are Accelerator tools and approaches to keep pace with changing market demands for those willing to take action.
4. Is personal finance going to be 100% digitised and, if so, when?
While the trend toward robo-advisor solutions and digitised financial planning will continue, there will remain a portion of personal finance that will always remain high-touch, relationship based financial planning.
Digital strategies are focused on low-cost or less-complex products that can be explained more simply through a digital platform. Chatbots are being used to explain the answers to more basic questions. And, most banks are working on futuristic wealth management desktop and mobile portals that create a more unified customer experience for the client. However, even as the wealth and advisory business becomes digitised, proprietary products; long-term planning; alternative asset allocations; and supervisory reviews will remain natural points for human advice.
5. How can companies and institutions encourage financial inclusion and education?
We are seeing different banks and asset management firms take different approaches to financial inclusion and education. Some are running gamified training courses that track to these objectives. Others are defining their product strategy to focus on trends such as Sustainable Finance and ESG investment trends.
Still others are exploring AI-enabled investment recommendations that remove unintended bias or look for socially responsible investments. Finally, the emerging Initial Coin Offering (ICO) industry is providing an opportunity for small businesses in the unbanked or underbanked economies to gain access to investments to finance new ideas that would not receive funding via traditional private equity or venture capital.