Technology in modern financial services can be a complex subject. This is what business leaders should focus on for success.
Time and again, we witness similar issues cropping up for our clients, from choosing the right tool for the job in building software and finding developer talent right through to ensuring the scalability and reliability of their systems.
The pace of change is increasing and shows no sign of slowing. Michael Jaiyeol, FinTech Lead at Erlang Solutions, says that financial institutions are looking to the IT function to do more to get in position for success in the future. While no two projects are the same, we’ve observed common themes from building fintech solutions for our clients that we believe will have a significant impact on the year ahead.
Leaders need a greater understanding of technology
We don’t mean getting as granular as in knowing how to code, but you do need a sufficient amount of knowledge to engage with your tech colleagues productively. This demands investment from business leaders into learning where the opportunities for innovation exist.
For those in doubt, being at the forefront of innovative technologies has shown to be incredibly important to the success of Alibaba and other tech platforms disrupting financial services in the Chinese market. Machine learning (ML) and artificial intelligence (AI), for instance, can help firms to better mitigate risk, combat fraud, personalise customer experiences and, crucially, analyse massive blocks of data to make truly informed decisions.
With a centuries-old monopoly over the financial industry now eroded for incumbents, similar to what happened in telecoms, significant disruption is being driven by technological advances. Although it is difficult to predict the future models of finance, they are sure to be created by the world’s brightest software engineers.
Secure, reliable IT systems are more important than ever
Trust in financial services institutions is extremely important to society as a whole, especially in the wake of the 2008 financial crisis. When banking and fintech systems are suboptimal from a security and operational resilience perspective, the risks to customer trust are substantial and potentially fatal if things go wrong.
The stress placed on systems caused by spikes in online commerce since the pandemic has shown that superficial add ons of digital products to keep pace with customer demands were often not done with reliability as a priority. While banks experiencing IT system failure is a regular occurrence, the potential damage from a reputational and trust perspective is now more severe than ever.
Don’t neglect the human side of tech
The rapid digitisation of the last two years was ultimately in response to changes in customer behaviour during the pandemic. Customer-centricity has been a winning strategy for fintech firms for some time, and any traditional firms who were not yet on board have now joined the party, even if a little late. Whether it is AI personalisation, blockchain powered digital onboarding or something else not yet imagined, at the end of the day, technology is a means to an end and being customer focused is the theme that underpins everything that has longevity. The goal is to deliver value to customers, and the tech used to do it is secondary.
Cultivating a technology literate workforce with an engineering mindset has never been of such value in organisations as it is today. According to the World Economic Forum, more than half of all employees will require significant reskilling in 2022. Finding and onboarding experienced fintech software developers can be extraordinarily difficult for CTOs and this will continue to be a challenge in 2022 and beyond. It is an area where well considered outsourcing can bring major business advantages.
As those of us working in tech know all too well, the shape of our professional lives in terms of how we work has changed immensely and we encourage business leaders to continue efforts to stay up to date with where technology is advancing.
Read more:
3 Key tech priorities for financial services business leaders in 2022