Bits, bytes & banking: Embracing technology in financial services
The financial services sector is undergoing a digital transformation fueled by technological advancements and evolving customer expectations. From traditional banking giants to agile fintech disruptors, the industry welcomes innovation to streamline operations, enhance customer experiences, and uncover new revenue streams.?
In this edition of TalentTech Weekly, we explore the catalysts driving this transformation, the challenges, and the reskilling and upskilling opportunities it presents. Let's get into it!
44% of financial services organizations store their data in the cloud
The digital revolution in financial services is multifaceted, driven by converging technologies and shifting consumer behaviors. At the forefront of this transformation is the rapid adoption of cloud computing, enabling institutions to streamline processes, scale operations, and enhance data accessibility.?
Today, over 44% of financial services firms store their data in the cloud, and this figure is expected to surpass the halfway mark, reaching 52% next year. What are the driving forces behind this trend? By leveraging the power of the cloud, firms can swiftly deploy mobile apps, AI-powered chatbots, and self-service portals, delivering a seamless and personalized customer experience.
AI and machine learning integration are empowering financial institutions to make data-driven decisions, optimize operations, and uncover valuable insights. According to Dimitri Raziev , Cofounder and CEO of Kolleno , AI is saving time on several fronts, including:
A study conducted by KPMG in 2023, showed that 59% of finance managers at companies with sales of over $1 billion were already using AI tools in their tax or financial processes. And of the 41% who aren't yet using AI, all are interested in doing so.
Blockchain technology, once seen as a disruption, is now being embraced by the financial sector. Its decentralized, transparent, and tamper-proof nature holds immense potential for streamlining transactions, enhancing traceability, and fostering trust in an increasingly digital landscape.?
The rise of decentralized finance (DeFi) platforms, built on blockchain technology, promises to democratize access to financial services and challenge traditional intermediaries. One current trend is the rise of decentralized exchanges (DEXs), which allow users to trade cryptocurrencies without a central authority. According to Statista , in 2024 revenue in the DeFi market is projected to reach US $26,170.0m.
Navigating the challenges of transformation
While the digital transformation presents unparalleled opportunities, it also introduces challenges that financial institutions must navigate. Data security and regulatory compliance remain major concerns, as institutions learn to understand the complexities of safeguarding sensitive information and adhering to evolving regulatory frameworks.
New technologies often require a cultural shift within organizations, requiring a transition from legacy systems and processes to agile, data-driven methodologies. As Daniel Dowling noted in our previous webinar, leadership teams must adopt a continuous learning approach to get their employees to buy-in to the technological shifts.
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Moreover, the rapid pace of technological advancement creates a persistent skills gap, as the demand for specialized talent in areas like machine learning, cybersecurity, and AI outpaces the supply. Retaining and attracting top talent has become a strategic imperative for financial institutions seeking to remain competitive in the digital landscape.
Seizing opportunities through reskilling
As traditional roles evolve and new job functions emerge, upskilling, reskilling, and continuous learning have become essential for professionals in the financial sector.
Financial institutions are increasingly investing in comprehensive training programs, equipping their workforce with the necessary skills to thrive in the digital age. For example, the Monetary Authority of Singapore (MAS) committed S$35million to upskill and reskill specialists in sustainable finance and has joined forces with the Institute of Banking and Finance (IBF) to launch a new Sustainable Finance Jobs Transformation Map (JTM). Carolyn Neo had this to say about the new initiative:
The rise of open banking and embedded finance is democratizing access to financial services, enabling non-traditional players to integrate banking capabilities into their platforms. Publicis Sapient projects that revenue from embedded finance will grow to US $160 billion by 2025, nearly quadruple the $41 billion it generated in 2021.?
To adapt to the world of embedded banking, a mix of strategic partnerships, reskilling, and rethinking the existing organizational culture and tech stack are needed to move forward.
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Learn more about the ongoing digital transformation of the financial sector in our latest white paper, ‘The digital transformation of the financial services sector’. The industry faces unprecedented challenges from rapid technological advancements and evolving market demands.?
Download our insightful resource to gain a deeper understanding behind the need for digitalization in this sector and how to build successful reskilling programs.
Written by: Alexandra Paasch