API, AI, Onboarding, Digital Transformation

FinTech – The Future of Technology in Finance

Our presence at the Future of Technology in Finance

On November 23rd Connective participated in The Future of Technology in Finance in Amsterdam. The day was kicked off with inspiring presentations by Fintech Holland and Startupbootcamp.

The Fintech landscape in the Netherlands is clearly changing rapidly at the moment. Amsterdam’s presence in the Fintech eco-system is of growing importance. Lean startup principles are further being introduced; Early product launch within small community -> learn -> improve -> large scale roll out.

Tech predictions for 2017

Predictions for 2017 are focused on the following themes:

Future evolution to Everything as a Service (Xaas)

Is packaged software dead? All over the world traditional business models are confronted with a recent major disruption named cloud computing where every service (software, platforms, hardware, infrastructure,…) is delivered through the cloud.

Businesses have two choices: digitize by adapting the use of the cloud or wait and get diminished as their transforming competitors get way ahead of them. We strongly recommend to choose the first one. Today, customers demand high-end services any time, any place, on any device at their convenience. And the cloud is the answer to these challenges. As the flexibility of these modules lets businesses start up much easier than ever before, drastically speed up go-to-market and enable business model innovation.

On the user side you see procurement and long purchasing processes disappear and complexity taken out of the customer journey; signing up and signing out often happens without even talking to a human being.  The cloud moreover allows them to access a full range of products and services while investing a minimum of time, resources and money.

Artificial Intelligence will be the new UI in banking

Dave Morin, co-founder of the social network Path, once said ‘AI is the new UI’. And this is exactly the evolution that we see today in the Financial Services Industry.
More and more see banks deploy Artificial Intelligence, also known as computer systems that are able to take over human tasks.

Take for example virtual assistants that respond to their customers’ and employees questions. Or robo-advisors that, based on customer insights, automatically develop personalized customer propositions like mortgages in real time.

Implementing Artificial Intelligence leads eventually to cost savings, which is something investors are demanding from banks. But imagine what impact this could have on customer experience. Financial institutions these days are more and more competing in this area. Offering a smooth, unparalleled customer experience is becoming a main differentiator. AI makes possible to collect large volumes of data at a very high speed and to find & analyze patterns more easily and above all automatically. Which results in better decision-making, development of a more comprehensive and insightful understanding of customers and highly personalized interactions.

API will drive business

Financial Institutions have to deal today with legacy systems and applications that are reactive and non-flexible which withholds them from innovation. So to survive and drive innovation they also need to look outside of the organization and embrace the innovative start-up ecosystem. By using APIs, which are relatively low-priced and simple, they easily implement the data from one application in another platform or service without having a complete IT overhaul.

Financial Institutions become more tech-firms 

These themes follow the common market trends that are expected to further accelerate the coming year(s): cybersecurity, millennials, API’s & blockchain.

The above themes will also largely influence how organizations will be organized. Change management but also the composition of management will dramatically change. Financial Institutions will be become more tech-firms with banking expertise then vice versa.

Where many organizations have implemented agile working with scrum teams, some of the presenters were open to admit that the benefits to date have been minimal so far. However this is likely to change and agile working is certainly the way forward.

In the afternoon there were interesting break-out sessions centered around the topics: digital identity and authentication, innovation, blockchain and payments. The conclusions were shared with the entire audience. These conclusions highlighted the dynamics of innovation that is taking place. From biometric authentication introduced by Bunq through pilot implementations of blockchain through the large opportunity PSD2 provides.

The day was concluded by the Dutch Central Bank and AFM sharing their activities and vision towards the Fintech market. Both entities are taking an increasingly active role in the Fintech developments, but at the same time need to make sure that they live up to their roles within the eco-system.

It is clear that technology is changing the financial services landscape dramatically. If companies do not digitise they will diminished or will eventually disappear.