As new technologies are embraced across different industries, the financial services sector cannot ignore the changes that are coming. New technology will likely change the business models of the traditional banking sector. This was a theme that ran throughout a number of discussions at ICT Spring 2022.
Decentralisation and data sharing are the future
As part of ICT Spring 2022, fintech was high on the agenda highlighting some of the opportunities, and challenges, that technology can bring. And big change is coming. As Dr. Jean Hilger, Head of the Finnovation Hub at the University of Luxembourg, pointed out, the current model of vertically integrated banks will not remain. For two reasons: “Firstly, technology allows us to organise financial operations in a decentralised way. And secondly, banks will finally need to share data – and intelligence on data – among themselves and with the consumer world.”
And the technology that will enable this shift towards decentralised banking and data sharing will bring many opportunities, including reduction in costs – for example automating activities via smart contracts – and improving customer experience. By evolving towards a decentralised model, where data is shared and made accessible to consumers, all customer-facing operations will move to digital platforms. These will provide customers with a seamless user-experience across all aspects of banking and will put more control into their hands.
New technologies put power in the customer’s hands
This idea of empowering customers through personalised investment products was also discussed during a roundtable featuring UBS, Mirabaud & Cie and fintech startup, Galytix. Henrich Baer, Country Head of UBS Luxembourg highlighted that the way communication between banks and their clients is changing. Thanks to new technologies that enable them to take control of their own investment portfolios, clients are now able to decide how they want to interact with banks. This is leading banks to take on a more advisory role, and to offer a personalised approach.
Jeff Mouton, CEO of Mirabaud & Cie also highlighted the opportunity new technology presents in helping to improve customer experience. “For us, the most important element is how we can get more face-to-face time with clients.” They are rolling out a fully integrated platform that reduces the amount of data handling required and are investing in AI-driven automation for things such as transaction monitoring. By removing the manual elements of these activities, their staff can spend more time with customers.
Tips for the future
So how should banks and financial services providers embrace innovation? According to Baer, companies should continue to disrupt themselves and do it fast. UBS take the view that companies should “fail fast, therefore fail cheap, and learn a lot.” Mouton advises companies to focus. “Don’t chase every innovation”, only the ones that make sense for your company. And Raj Abrol, Co Founder and CEO of Galytix finished by suggesting companies should not get obsessed with Big Data. “Big Data is important, but not ‘Too Big Data.’ Start by leveraging the data you’ve got.”
