What does the future of banking look like? It’s hard to tell.
It’s a vague answer but if you’re remotely familiar with the world of finance you’ll know how unpredictable a sector it can be. Since 2008, financial services have had to adapt to a lot of ‘new normals’... from the advent of open banking and blockchain to cryptocurrency, the last decade has been one of profound, unprecedented change.
But what isn’t hard to tell is that finance is becoming an increasingly tech-dominated space. The word ‘fintech’ didn’t really exist ten years ago, and many of the businesses that work within that sphere are still only toddlers. According to an EY census, the average age of UK fintech businesses in 2017 was just 5.3 years, with only 61 thousand people working for fintechs a year later. It’s still a young industry subsector and is spawning subsectors of its own at a rapid rate. I mean, seriously, there is RegTech, WealthTech, FinTech, InsurTech, WhateverTech...
With all this change, banks need to be not just adaptable, but agile. Accenture claimed in a recent report that traditional retail banks are out of sync with the realities of digital banking, burning through cash on outdated distribution models and legacy systems.
Many of these systems are out of date, hard to improve and tough to rebuild thanks to their complex structure - banks know they need to digitize, but this rigidity is proving a tough obstacle to overcome, especially for larger banks. We recently produced a report on the Future of Wealth Management and found that 84% of companies failed in their efforts to digitise.
From automation to regulation, technology has already driven innovation in the banking space, delivering a better service for clients and a more efficient business for financial institutions.
Taking advantage of automation
No, the robots aren’t taking over (yet...), but they can have a hugely positive impact on streamlining wealth management processes. Automation is invaluable in becoming more agile - reducing overheads and increasing productivity, taking control of tasks from client onboarding through to billing and reporting.
According to a Boston consulting group report, the number of individual regulatory changes an organisation must keep track of on a global scale has more than tripled since 2011, with an estimated 200 revisions taking place per day, putting increasing pressure on legal and compliance departments.
It’s difficult to stay on top of and remain compliant as these regulations increase the internal workload. While increasing the headcount can help, it’s an increasingly costly strategy.
Automating as many of these processes as possible and working with a tech provider that can continuously update their systems and processes without coming up against complex legacy systems can be a more effective route and also reduce the opportunity for human error.
No need to start from scratch
The good news is you don’t have to do all of this yourself. A great way to make your business more agile is to partner with an external solution provider - it’s a lot easier than rebuilding your internal structures. Working with businesses whose bread and butter is technology allows you to focus on, well, everything else.
Take a look at the services we offer to see if Nucoro can find a solution to your problem, or have a read our Future of Wealth Management report for more information on the current and future state of wealthtech.