8 Technology Trends Shaping the Future of Finance
As accelerated digital innovation continues through 2021, we expect eight technology trends to impact financial services this year.
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Digital transformation is not new in the financial services industry, but 2020 undoubtedly accelerated activity and that isn’t likely to slow down. Senior executives across the industry are fully aware of the implications. “The pandemic has not only altered the way engagement is viewed across every touchpoint, it has also accelerated digital transformation, creating a need for relevant and personalized experiences,” adds Sumit Virmani, CMO at Infosys.
In 2020, consumer behaviors shifted overnight. Bank branches and investment offices closed. Trading desks moved to home desks. Market volatility went wild and volumes remain at all-time highs. Financial institutions were forced to quickly adapt and to adopt new technology solutions, and 2021 has continued to build on those foundations. As Sandy Shen, Senior Director Analyst at Gartner, points out, "Businesses that can shift technology capacity and investments to digital platforms will mitigate the impact of the outbreak and keep their companies running smoothly now, and over the long term.”
What has become abundantly clear is that banks and financial services organizations must modernize their core data systems and architecture to meet rising customer demands, the increasing volume of data, and their need for digital insights. Data centers must evolve to enable and support the implementation of AI initiatives. Simplifying the development and deployment of applications and solutions will allow financial services organizations to accelerate contact and mobile payment solutions, and make greater use of robotic process automation (RPA) and bots to streamline and simplify operations. As accelerated digital innovation continues through 2021, we expect eight technology trends to impact financial services this year.
Remote work was established from necessity but is here to stay. Huge technology investments to support remote workforces, including collaboration tools and virtual desktops, mean new ways of working that will continue to evolve for at least part of the workforce. Financial organizations must weigh many factors such as recruiting and retaining employees, maintaining job satisfaction, updating technology, addressing security challenges, monitoring cost savings, changes in business travel and activities, and minimizing impact on productivity and creativity.
Firms looking to extend remote working options will likely want to review their remote collaboration and security technologies, which may have been adopted under pressure and may be less than optimal.
WWT and Pure Storage have partnered to run mission-critical workloads such as core virtualization, data analytics, and AI for customers to help support remote work.
AI and ML at the heart of business
Artificial intelligence (AI) and machine learning (ML) used to be optional extras of dubious value given their difficulties in setting up and turning a profit. Fast forward to 2021, they play a central function in organizations’ day-to-day, across everything from productivity to revenue. Financial organizations are deploying AI to handle sensitive financial transactions such as investing and lending, trade decision-making, and fraud detection. In this Businesswire report, AI in fintech in 2019 was worth a global US$6.67 billion versus US$22.6 billion expected in 2025. Financial institutions that previously relied on legacy technology are catching up with digital-native competitors in the fintech and bigtech space by tapping into AI and ML.
See how WWT and Pure Storage have teamed up to simplify storage automation and implement ruthless standardization. Ruthless standardization brings the ability to have repeatable processes that reduce snowflake configurations or human error. This provides banks and financial organizations a through-route to design, develop, and deploy a data strategy and architecture, and promote customer satisfaction, usability, and simplicity without halting business.
Cyber and ransomware attacks on the rise
Costly and embarrassing, ransomware attacks were frequently in the headlines over the last year as ransomware has become a lucrative and sophisticated industry. A recent FBI IC3 Internet Crime Report stated that cybercrime cost individuals and US businesses about $4.2 billion in losses in 2020, up 69 percent from $3.5 billion in 2019. Cybersecurity firm Cybersecurity Ventures has predicted that in 2021 businesses across the globe will experience ransomware attacks every 11 seconds in 2021. The same company estimates the cost of ransomware to top $20 billion in 2021, with global cybercrime damages likely to reach $6 trillion.
The financial industry is a large target for many different groups — from organized cyber-criminals seeking to steal money to politically motivated groups attempting to make a statement. Established players are even selling ransomware-as-a-service. Find out how you can protect your business from ransomware.
Financial services organizations are working to build and retain loyalty with modern customers who expect a highly personalized experience, omnichannel access, mobile-friendly sites, and intuitive applications as a standard. As digitization accelerates, demand growth for more and better digital experiences puts technology at the cutting edge of differentiation. To stay ahead, you have to ensure your institution is not only up-to-date but also leading the way in innovative technologies. Financial organizations need to ensure they have the infrastructure to enable the speed, security, reliability, agility, and mobility these innovations entail.
The adoption of AI, Internet of Things (IoT), and automation is now widespread and common. With the right infrastructure, you can leverage huge quantities of data to enrich AI, gather insights, fine-tune investment decisions, serve customers, enable new clients, and more. However, many financial institutions have found it challenging to store, secure, access, and analyze this data, especially when testing and deploying innovations. Technology is a challenge and technical staffing is in short supply as the competition for data science and AI expertise intensifies.
Pure Storage and WWT have aligned with other leaders in cloud-enabling technologies, working together to expand the capabilities of the private cloud while reducing complexity. Learn how we can offer your cloud your way to expand access for even more use cases resulting in further data expansion.
Markets are opening up
Retail trading has dramatically increased in recent times and will continue to do so. Despite the recent volatility, retail traders made up 25 percent of stock trading volumes according to a Business Insider investigation. This increase in retail trading can be attributed in part to the expansion of, and ease of access to, electronic and automated trading technologies. These technologies are more efficient and cost less than anything previously available to retail investors. New investors are entering the market thanks to mobile applications, robo-advisory, and zero-commission trading from online brokers such as You Invest by JP Morgan, Merrill Edge, Fidelity, and Schwab, as well as fintech disruptors like Ally Invest and Robinhood.
RegTech ramps up
Biden’s election in the U.S and Brexit in Europe are likely to give rise to increased regulatory enforcement and complexity worldwide. This comes just as regulatory technology (RegTech) hits the mainstream, expected “to grow at a CAGR of 21.27 percent and anticipated to reach around USD 33.1 Billion by 2026” according to Globe Newswire. Meanwhile, financial firms are improving their compliance technology, leveraging AI, ML, and natural language processing (NLP) to help with self-operated trade monitoring, compliance obligation tracking, and regulatory reporting. On the other side of the equation, regulators are also employing RegTech for market surveillance and implementing sandboxes to support innovation.
Head in the clouds
Hybrid cloud, multicloud and Storage-as-a-Service mean financial institutions no longer need to rely on legacy storage solutions. Instead, organizations can accelerate innovation for cloud-native and virtualized applications with a modern data platform that unifies hybrid and multicloud ecosystems.
A hybrid cloud computing environment can assist financial institutions with both in-house and public cloud resources to enable flexible data, application mobility and operational agility across IT infrastructure. A mix of cloud and hybrid cloud environments offers operational and financial flexibility to meet organizations’ needs as they evolve. Businesses can adjust their CAPEX and OPEX infrastructure usage according to workload demand and data center and budget requirements. Specific configurations meet your infrastructure needs with an easy path to hybrid-cloud and cloud-native deployment, and pay-as-you-go guarantees predictable workloads in an easy, repeatable framework.
Pure Storage has a solution for cloud users. Pure-as-a-Service™ (PaaS) delivers a cloud-like experience available for public cloud, on-prem or in co-location. It’s easy to initiate and ramp-up, with instant access to additional on-demand capacity as needed. One subscription contract covers all selected services and can be easily increased or reduced on demand.
A new generation of entrepreneurs has entered the market, with millions of new businesses registered in the US. In the year 2021, we’ve seen a continuance of high-level registration rates, nearly as high as those in 2020, based on data from the U.S. Census Bureau. If this trend continues, the above-mentioned talent scarcity may intensify as innovators look to bring their own projects to market.
Given the acceleration of digital innovation seen during the pandemic, it’s safe to say there will be no looking back. We can expect to continue evolving into a new, digital-first normal which will pave the way for exponential online growth well into the future. Unlock the value of your firm’s data with a storage platform designed for innovation. Explore financial services solutions for WWT and Pure Storage.