The financial industry needs to harness technology to drive innovation and improve customer confidence, according to experts.
This was the consensus of a panel discussion for alumni at Imperial College Business School, featuring a number of industry leaders working within financial services.
The panel had gathered to debate whether the changes taking place within the financial services industry are caused by disruption - an innovation that leads to the creation of a new market - or from natural evolution.
Ten years on from the infamous collapse of Lehman Brothers, the financial services industry has been forced to go through a radical transformation to regain the trust of those they once took for granted.
During this time, significant technological advances have allowed non-traditional financial companies to participate within this marketplace. Actively encouraged by the regulators across the globe to create transparency, empowering clients and bringing broader choice, access for all has had a major impact in the way financial services are consumed today.
“It’s hard to innovate in such an uncertain environment such as with Brexit.” Andrea Dunlop CEO of Merchant Acquiring Europe, Paysafe
With the advent of cloud-based services technology, banking infrastructure which was “heavy and clunky” and based on disparate legacy technology, has become “light and agile”. It has moved away from a utility based model to a services driven one. This has allowed technology to create alternative stored value ecosystems allowing for open and real-time banking and financial services.
Sean Kiernan, CEO of DAG Global, a financial services group, said: “Digitisation is happening very quickly and crowdfunding has contributed to some disruption.”
The panel also discussed how financial firms can embrace the opportunities presented through blockchain and the Bank of England’s plans around digital currency and they looked at how countries such as Georgia have successfully introduced digital currency.
The experts looked at the issues surrounding traditional banking and how banks are struggling to keep up with the rapid pace of technological change.
The conversation then moved onto open banking – a system where customers give banks permission to use their data. Andrea Dunlop, CEO of Merchant Acquiring Europe, Paysafe, said: “We want startups to take advantage of open banking. But the regulator needs to be doing more to improve standards.”
AI, cryptocurrency and blockchain have the power to transform customer services according to Alex Powell, CTO, Euroclear, UK and Ireland, a Belgium-based financial services company. However, cybersecurity is “a massive threat” and “can do a lot of damage”. He said: “We’re spending a fortune on cybersecurity, as do a lot of other financial services companies.”
The panellists were then asked whether the Brexit deal will discourage Fintech companies from coming to the UK. Ms Dunlop said: “It might be more challenging to get investments and some firms may relocate their offices to other countries.” The panellists agreed companies need to manage the impact of Brexit by attracting European talent to work at Fintech firms in the UK.
Ms Dunlop added: “It’s hard to innovate in such an uncertain environment such as with Brexit.”
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