FINANCIAL SERVICES – 2017 Predictions
Many Financial Services experts agree that we start 2017 not knowing where it will lead. Article 50, the potential chaos of the new US administration’s deregulation, the challenges of identity for PSD2, the roll out of new digital banks… it’s either scary or exciting depending upon your mindset.
What it does mean, though, is that change brings opportunities – so let’s consider what those opportunities might be:
- Customer service, customer engagement – the Age of the Customer – these are the disruptive influencers that will offer opportunities. Increased use of low-code IT solutions to test and refine/roll-out cost-effective automated marketing/service innovations.
- The increasing cost of regulation brings with it a demand for someone to manage those costs – a shift in focus towards tools such as big data and AI means a shift from FinTech towards RegTech
- Payment Services Directive PSD2’s demands – while not probably not affecting firms too much in 2017 – will flag up a current barrier – identity. The lack of a current identity structure will put the focus on fin services firms to solve that fundamental problem to implementation
- Payments will more further from banking towards POS lending with opportunities for links to digital banks. Q1 2017 will see the launch of ‘challenger’ banks Starling, Tandem and Monzo. Will this be just the start of digital banking’s penetration? Initially they’re likely to target a narrow demographic but soon widen that focus and roll out the offering.
- AI and Big Data will trigger a shift in focus and present more opportunities through data differentiation. Indeed, expect a major non-financial player to seize digital banking’s opportunities, possibly with entry via an acquisition.
- Finally, don’t forget Blockchain. It may be quiet but it’s far from dead – maybe Royal Mint’s decision to look at gold trading means that 2017 could be the perfect time to get ‘gently’ involved in Blockchain innovation.
So while 2017 will, for some in financial services, ultimately be remembered as a difficult year where their aspirations collided with the year’s new challenges, for others 2017 will be a year of opportunity where they use FinTech to target offerings to new needs.