2016 will prove to be a pivotal year for financial institutions as FinTech innovations hit the mainstream. Although traditional firms have not always been known for speedy innovation, they will be forced to reexamine antiquated processes in order to compete on client service amidst an increasingly exacting regulatory environment.
As cost-pressures, customer demands and competitive threats continue to mount, all players will turn to intelligent systems to augment human expertise and services.
1) Prediction: 2016 is the year of “Blockchain-as-a-Service”
We predict that blockchain-as-a-service emerges as a necessity for financial institutions adopting or initiating blockchain based initiatives. R3 already has 42 bank members, including every bulge bracket player, and firms like Deloitte and Microsoft will play a critical role in the overall adoption, implementation, and ultimate success of blockchain initiatives.
2) Prediction: Exceptional Client Service Will Win the Advisory Game
It's no secret that robo-advisors have experienced phenomenal growth in the last several years, driven by their ability to deliver approachable investment management services at a low cost. Traditional firms aren’t giving up easily though, delivering competing client-facing products to augment the expertise of their face-to-face advisory offerings.
The battle for market share will not discriminate based on the type of advisor; rather, the winner will be the advisor (robot or human) that is able to achieve the most critical aspect of wealth management service: the ability to create an exceptional customer experience. The advisors that master the art of client communications (and do it through automation) will end up victorious at the end of 2016.
3) Prediction: Financial services organizations will embrace intelligent systems
Costs associated with data storage, computational capacity and processing speed have continued to decline in the last five years. Relatedly, there has been an exponential rise in the collection and analysis of data by financial services organizations.
As our co-founder, Kris Hammond, outlines in a recent article for Computerworld, the accessibility of better, faster technology at a significantly lower cost is laying the groundwork for intelligent systems’ success, leading to organizations embracing these systems to automate processes related to compliance and client communications. Areas of the business that are comprised of basic analysis and repeatable processes will be especially ripe for automation.
4) Prediction: Seamless, cross-device experiences will finally be a reality
Financial institutions have been attempting to deliver a seamless customer experience across all touchpoints for some time. However it’s proven to be a difficult task, particularly due to the amount of disparate and siloed information firms have on their customers. Finally, the ability to automate personalization at scale will enable a more consistent and current digital customer experience.
USAA, a widely-respected innovator in the financial services space, is a prime example of a company using new technologies such as Quill to ensure an optimum cross-channel customer experience by transforming member data into custom communications that explain investment performance towards goals.
Other financial services organizations will increasingly follow suit to deliver a personalized and high-quality experience across all contact points, no matter the transaction.
5) Prediction: Peer to Peer lending will grow-up
As the peer to peer landscape evolves, regulatory surveillance will increase, pressuring players to do their due diligence with respect to assessing borrowers. Solely using traditional metrics like FICO score and annual income to determine creditworthiness will become antiquated.
Regulators will be convinced that information such as a borrower’s social media presence, educational background and financial behavior are viable ways to assess an individual.