25 Jun WHAT DO FINANCIAL FUTURISTS AND KEYNOTE SPEAKERS PREDICT IS COMING NEXT?
Look at financial services futurists’ and keynote speakers’ reports and presentations, and they’ll tell you that industry has undergone a remarkable transformation in recent years. Credit a dizzying combination of new advancements in technology, changing customer expectations, and a growing host of (you guessed it) regulatory reforms. Being financial services futurists, we figured the time was ripe to talk about some of the waves of change rocking the financial services landscape and reinveinting the way we manage our money. What say we do just that?
To kick things off, blockchain and DLT have emerged as game-changers in the financial services sector. These technologies provide secure, transparent, and decentralized platforms for recording and verifying transactions, eliminating the need for intermediaries. The implementation of distributed solutions in areas such as payments, remittances, and smart contracts has the potential to reduce costs, enhance security, and streamline processes.
But beyond this, the concept of open banking, driven by application programming interfaces (APIs), allows third-party financial service providers to access bank data securely with the customer’s consent. This enables consumers to share their financial information with multiple providers, fostering competition and innovation. With open banking, as financial services futurists like to remind, customers can benefit from personalized financial advice, budgeting tools, and seamless integration of various products and services.
In addition, we’d be remiss if we didn’t point out that robo-advisors have gained significant traction in the investment management space. These automated platforms leverage artificial intelligence (AI) algorithms to provide personalized investment advice and portfolio management services. To wit, robo-advisors offer low-cost, accessible investment options, catering to a broader range of investors. On top of this, AI-powered financial planning tools analyze consumer data and provide tailored recommendations for budgeting, savings, and debt management.
The rise of digital currencies, including cryptocurrencies like Bitcoin and Ethereum, has disrupted traditional notions of money to boot. While cryptocurrencies offer decentralized and borderless transactions, central bank digital currencies (CBDCs) are gaining prominence as digital representations of fiat currencies issued by central banks. Perhaps the easiest way to think of it is that CBDCs tend to provide enhanced security, faster settlement times, and greater financial inclusion, as they can reach unbanked populations and facilitate cross-border transactions.
And then regulatory Technology (RegTech) solutions are also leveraging automation and AI to streamline compliance processes for financial institutions. These technologies enable real-time monitoring of transactions, risk assessment, and fraud detection, reducing compliance costs and enhancing regulatory effectiveness. RegTech solutions also help ensure adherence to anti-money laundering (AML) and know your customer (KYC) regulations, enhancing the security and integrity of the financial system.
Increasingly, consumers and investors are prioritizing environmental, social, and governance (ESG) factors in their financial decision-making as well. To this extent, sustainable finance initiatives are promoting investments in renewable energy, green bonds, and socially responsible companies. Financial institutions are incorporating ESG criteria into their investment strategies, offering ESG-themed funds and advisory services, thereby driving positive environmental and social change.