On 3 and 4 November in Sydney, financial services professionals and technology innovators gathered at the latest edition of FST Media’s Future of Financial Services.
The event saw 79 speakers from both the technology and finance sectors share their insights on the development of the financial services sector, and how it adapts in a rapidly transforming digital environment.
We take a closer look at some of the topics discussed by leaders in the industry today, the challenges the financial services sector faces and the digital transformation trends paving the way for more innovative customer experiences in the future.
Embracing a new digital world in financial services: AI, Web3 and the Metaverse
The world has undergone a dramatic digital shift in recent years, resulting in the transformation of industries worldwide. The advent of artificial intelligence (AI), the Metaverse and Web3 in general has started to change the way financial services is approached.
AI has become integral to any modern business as it allows companies to deliver faster, safer and more efficient performance to employees and customers. It now lies at the heart of digital strategy, enabling organisations to stay relevant, provide personalised services and achieve more with less resources, saving time and costs.
This is particularly evident in the North American banking sector. It is projected that US banks can expect to save around US$70 billion by 2025 simply by automating middle-office tasks with AI. Additionally, AI has improved security through a proactive approach to detecting fraud by tracking data anomalies and transactional patterns.
Web3 and the Metaverse
Though still in their relative infancy, Web3 and the Metaverse have significantly grown in the past year and have the potential to become immersive technological experiences that can change the financial services sector.
The Web3 ecosystem has already impacted how humans and machines interact, while the Metaverse has purportedly been predicted to be: “the next evolution of the internet – a 3D model of the internet”, opening a pathway to new marketing opportunities, infrastructure and services.
This potential can already be seen with the merging of real and virtual assets and is something that industry experts and leaders are keeping an eye on. For instance, HSBC’s purchase of virtual land in The Sandbox earlier this year, while at the same time reducing the number of physical offices, is an early indication of the Metaverse and Web3’s promising utility in the financial world.
The growing importance of cybersecurity
Cybercrime has ramped up in recent years, leading to cybersecurity being top-of-mind when it comes to the financial services industry. The financial impact of data breaches has increased, now costing an estimated US$3.62 million each time.
Due to the constant growth and sophistication of cybercrimes – with an estimated 30,000 websites hacked daily on average and over 60% of companies worldwide experiencing at least one type of cyberattack – it is no longer a matter of “if” and is now simply a matter of “when”. The financial services sector should in turn be prepared for attacks that are greater in volume and sophistication.
Managing hybrid work and a flexible workforce
Although there’s been a shift towards hybrid working globally, this working arrangement is still a ‘work in progress’. Many organisations and leaders have yet to find the optimal hybrid working set-up to support employees, but there are solutions that support a world of remote work.
The right change management strategies are essential to change not just leadership, but also employee mindsets on how to approach flexible working. In addition, improved communications and user-centric workflows must be established to improve overall processes so that the hybrid workforce can thrive no matter where they are.
The non-negotiable shift to cloud computing
Moving to the cloud has become essential for financial services organisations if they don’t want to be left behind. Not only will this enable more agility, moving to the cloud will also improve security capabilities.
Many businesses are now taking this migration more seriously, with a recent example being Suncorp and its goal of moving 90% of its workloads to the public cloud and 10% to a hybrid cloud environment by 2024.
Prioritising customer experience (CX)
With CX becoming more important than before, businesses in the financial services industry must pay attention to new ways of improving the customer journey. One way is to reduce friction by listening to what customers are saying and addressing their concerns. This ensures customer experiences are as smooth as possible, minimising the chance of customers dropping out or exiting their customer journey.
Creating a hyper-personalised CX is also another key strategy in improving the customer journey. Hyper-personalisation enables businesses to build better engagement, relevance and trust, demonstrating that they know how to address their customers’ needs and solve their problems.
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