I recall when in my second year at high school in Zimbabwe, when slide rules and log books were the norm, I received my first calculator – a Casio with six-number capacity on the screen, weighing a ton. Sure, it was 1973, but I was convinced then that I had the mathematical tool I needed to conquer the world, and that nothing better could come along. Some 13 years later when I began my career as an IFA, I received one of those brick-sized Nokia cell phones. I had arrived! What could beat this?
In both cases of course, these advances, though almost unimaginable at the time, highlight how technology revolutionises the way we work. Improvements in the last 20 years alone can only point to the fact that in another two decades, technology will be completely different, so embracing change and adapting as you go are recipes for success. Here are four areas where it’s going to count in financial services.
Different working environments will emerge
Down the line financial companies will more than likely no longer be housed in huge, multi-storied buildings. Workstations will be at home and all work will be done online with physical interaction with clients kept to a minimum or held via Skype. The normal working hours will no longer exist; employees will work as and when required, which is not an issue with 24/7, fast internet connectivity. Time will wait for nobody and if service is not instant, clients will walk away.
Software may outpace employees
Several well-known financial institutions have already replaced manual processes with software that automatically directs a client to their required service area. Fund managers can obtain all necessary fundamental information on various stock markets and the underlying financial institutions at a touch of a button, by simply utilising software packages. This has the potential of cutting down the number of research analysts previously needed. Algorithms now exist that scan markets daily without human intervention, looking for opportunities that comply with pre-arranged criteria, while other software has been designed to scan a variety of shares and to provide automatically potential buy and sell signals using technical analysis.
More efficient systems may well result in the number of manual processes and jobs being reduced. If employees are warned of such a possibility, then upskilling can take place to ensure employees can grow with technology.
Tightened IT controls will be needed
The introduction of POPIA (Protection of Personal Information Act) will see FSPs needing to understand how fintech fits into business processes and what information is being held. More thorough due diligence will need to be done on IT providers, including assessing their controls on back-ups and privacy.
Compliance will evolve
There is a myriad of laws that financial institutions need to comply with, which are evolving with the fintech revolution, making the guidance of a qualified compliance officer essential in adding a layer of risk-assessment to the process of compliance and technology.
It will still take time and the picture isn’t perfectly clear yet, but those who do not embrace the technological revolution will potentially be unable to compete with competitors who do. Quo vadis financial services industry? Into the fintech world, and stragglers beware.