• Adrian Cannon, Founder at Finch Global


• 28.10.2020 10:45 am
financial services

Almost three-quarters of British adults used online banking and 50 percent used mobile banking in 2019, according to UK Finance. With the coronavirus pandemic closing physical branches and the use of cash falling of a “fiscal cliff”, digital transactions have become even more crucial for the economy. The latest forecasts predict mobile banking is set to be more popular than visiting a high street bank branch by the end of 2021, but that could well prove to be too conservative in the Covid-19 world.

Many businesses have had to change and adapt to new ways of doing business to evolve in the market. For most, this adaption process is not over. As we move into a new decade, how will technology shape the UK’s financial industry in the next five years? Going back to the “way things were” is not even an option.

AI’s time has come

As society moves away from physical interactions and cash transactions, artificial intelligence (AI) will have a greater role to play, especially in customer service and on-boarding. Virtual assistants and chatbots will become more widespread and AI will continue to speed up transactions and reporting and compliance processes across the industry – developing a “self-service” mind-set in the industry.

AI will also have a vital part to play in spotting behavioural patterns in financial transactions to reduce fraud and criminal activity. Patterns that even the most experienced investigators would struggle to find. 

The rise of blockchain

It is vital for the financial services industry to innovate and to investigate new technologies to improve their products and services. Any data that is captured within a blockchain structure leaves a very detailed audit trail, eliminates errors and can improve an IT systems ability to prove compliance real time rather than once a year. This will lead to improved regulatory reporting and monitoring while also reducing costs. It may cause regulators to require real-time compliance reporting.  It is no surprise then to see more financial institutions now experimenting with blockchain as a way to improve transparency across the industry.

The power of digital data

Data is everything in financial services – covering everything from Know Your Customer (KYC) and Anti-Money Laundering (AML) compliance for financial institutions to combating fraudulent banking transactions for customers. The more insight institutions gather from datasets, the quicker business can gain access to finance and financial services, and the more effective banks and other lenders can be when combating fraud.

There is currently a very fragmented system used across the industry – with individual institutions gathering and analysing their own data pools. The industry rapidly needs to pull together to support the recovery of UK’s fragile economy.There will be opportunities to generate more industry-wide collaboration than ever before and those institutions that choose not to collaborate will suffer both commercially and reputationally. The financial services sector needs to put its differences behind it for good.