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MOBILITY AND THE FINANCIAL SERVICES WORKFORCE

By Achi Lewis, EMEA Director, NetMotion

 

Financial services are not so different from other industries in that an increasing number of employees require around-the-clock access to corporate IT services via mobile devices. As the always-connected, always-on smartphone generation continues to enter the workforce, financial services organisations find themselves needing to offer more flexible work environments to stay competitive. Many millennials in the industry have reported frustration and a general dissatisfaction with the devices and applications available to them, remarking that they want more freedom to use mobile devices. But this industry leads lags behind others in the adoption of mobile technologies for its workforce. The regulatory environment doesn’t help with IT leaders facing risk management, compliance pressures amongst others. And it’s not just compliance – financial services face numerous security and data protection concerns; data breaches are very costly in this industry, not only directly but also due to the loss of goodwill and new customers. Also, legacy platforms and applications mean that fewer companies here have integrated mobile applications with legacy back-office systems.

 

Whilst that level of convenience may be appealing to employees, the introduction of mobile devices as tools in the workplace can put financial information at greater risk of theft by cyber criminals. Despite the risks, the benefits of mobility are too great to ignore. Beyond the human-resources implications, IT leaders in the financial services sector recognise that mobility creates a more flexible work environment, boosts operational efficiency and user productivity, and improves user experience whilst contributing to satisfaction among clients and customers alike.

 

Financial services organisations need to support multiple branch locations, ATMs and advisors working to visit homes and businesses in the community. A successful mobile initiative caters to the changing needs of its customer base by incorporating a network solution that optimises, secures and delivers visibility across all enterprise and cloud applications and services. The solution has to work seamlessly in tandem with native OS security features, containerisation solutions and the locked-down security enabled through established tools such as the Apple Device Enrollment program to deliver a secure, end-to-end mobile experience. It reaches wherever they need to serve customers, and offers the flexibility to use smartphones, tablets and laptops running Windows, Android, MacOS or iOS.

 

Insurance companies

In the insurance space, agents and claims adjusters have long used mobile devices in the field to process claims. These allow representatives to capture statements about the accident, document geo-location information, take pictures of the scene, license plates, insurance ID cards and driver’s licenses, and contact towing services. In the case of insurance sales, tablets can be used to automate every step of the process, from client discovery to policy submissions. By eliminating the typical back-and-forth between agent and underwriter, companies can reduce the number of meetings and significantly shorten the sales cycle. On the back end of the sales process, agents are able to easily generate quotes, ask underwriting questions, submit applications, and execute e-signatures and payments electronically, enabling them to issue new policies within minutes rather than days.

 

Retail banks 

With mobile banking becoming so popular, the traditional brick-and-mortar bank branch may seem obsolete. Indeed, between 2007-2017 the U.S. lost 10 percent of its physical bank branches. The rate of closures is even higher – approaching 50 percent – in countries such as Sweden, Norway, Denmark and the Netherlands. However, even though branch visits have fallen overall, bank branches still play a vital role — even among millennials. Bank customers still prefer to visit a branch when opening new accounts, dealing with problems and making large transactions. Branches remain crucial for acquiring new customers and upselling and cross-selling to existing ones. Bank executives generally see the role of the branch changing, with employees using their face-to-face contact with customers to educate them on the use of their mobile devices and assist with financial decisions. Some of the leading banks are even stationing digital ambassadors at branches, equipped with smartphones and tablets, to demonstrate services such as remote check deposit. Others are experimenting with replacing tellers in favour of roving employees who use tablets to help customers apply for loans or open accounts. Outside the branch, this mobile capability is seen as key to reaching unbanked or underbanked customers, especially in emerging markets.

 

Investment management organisations

Millennials are poised to inherit trillions of dollars over the coming years. For financial organisations this poses unique challenges. This generation tends to be averse to sit-down meetings in an office with an investment advisor, partly because they have grown up with easy access to financial information and comparisons just a click or tap away. As a result, financial advisors are adapting by using videoconferencing and other tools that offer convenience whilst maintaining the value of a face-to-face interaction. It’s no surprise, then, that more than half of investment management account holders say that they value the option of having immediate access to a video call with an advisor. Also worth considering is that the average age of a financial advisor is now 50, with 42 percent being over the age of 55. Therefore, in order to attract a new generation of advisors, investment management firms need tools that enable secure mobile working environments, including mobile apps that connect seamlessly to review portfolios, confirm balance transfers, monitor alerts, place trades and follow market movements.

 

Financial organisations find themselves facing big challenges in the years ahead, given the rapid acceptance of mobile devices in our daily lives. They will need to overcome a number of security risks while embracing mobile technologies. If not, there is a real risk of losing employees and customers to more-nimble, mobile-native FinTech startups. Tackling this problem requires a comprehensive mobile-network solution that enables a single, seamless and secure network.

 

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Finance

HOW ENTERPRISE INFORMATION MANAGEMENT, CLOUD AND ANALYTICS WILL IMPACT FINANCIAL SERVICES IN 2020

Richard Mill, director at Business Systems (UK) Ltd

 

Business Systems’ Will Davenport on which drivers of change will most affect the financial services sector in 2020

 

Recent multi-million pound fines levied on financial services firms such as Tullet Prebon have acted as a wake-up call to City CIOs. That’s because the FCA now includes Voice as a record medium, and is no longer prepared to tolerate delays in locating conversations it is examining.

 

As a direct result, we will witness the formal incorporation of Voice as a peer form of information storage to email, text or internal documentation. That’s not happened to date as it’s historically been an unstructured and fairly unwieldy medium, but modern technology is completely changing that picture.

 

Richard Mill

City firms are starting to manage all their various data assets by using an EIM (Enterprise Information Management) approach. This is a discipline centred on being able to integrate all your data into one structure and applying the right archiving and retrieval workflows across everything you do: we therefore anticipate a great deal of interest in audio-enabled EIM project work in 2020.

 

Cloud sweeps all before it

 

In 2020, the cloud tide will be unstoppable. That’s partly because people are used to accessing applications in the cloud or storing data there, but there’s now going to be a push to use cloud as a way to centralise the bank’s IT systems. The argument as to whether the cloud is insecure has long been settled with City CIOs judging cloud as often safer than their existing on-premise solution.

 

As a result, there’s no reason to continue paying for expensive hardware that requires tending, patching and upgrading. In 2020, look for cloud trading turrets with the back-end being remote and offering porting of voice records into the cloud. That latter step may be a challenge for financial services firms with multiple and legacy voice recording platforms in place, so the cloud move may lead to overdue rationalisation and integration projects.

 

Ultimately, the cloud represents a whole new approach to consuming IT and building apps in the Square Mile. Financial services firms are frustrated with devoting too much resource to old mainframe systems when they would like the modern technology infrastructure in place to support them to be more agile. Cloud will be very liberating for the sector.

 

Strong analytics user cases emerge

 

Analytics technology has evolved and what used to be referred to as dumb data is now a source of business intelligence. Useful data hidden in audio files that used to be discoverable through hours of transcription can now be processed in modern speech analytics systems — making what was originally inert, unstructured data become structured data, which can be easily queried in order to spot patterns and find interesting anomalies.

 

I predict that in the new decade using speech analytics financial services firms will finally gain a richer understanding of what their customers ask for and find problematic, as data mining probes can be run over a vast set of customer interactions.

 

It will mean trading floor managers will have even better detection and forensic tools at their disposal to understand what’s happening, which will be a win-win for customer and regulator alike.

 

In 2020, Voice will be seen an important strategic asset for the financial services firm CIO.

 

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Finance

WILL BLOCKCHAIN REVOLUTIONIZE FINANCE?

By Ken Timsit, ConsenSys

 

Over the last 10 years, researchers, software developers, start-ups, and large companies have been conducting experiments aimed at determining whether networks based on blockchain technology can ultimately – in whole or in part – replace the infrastructure on which financial institutions and capital markets are built.

 

In today’s electronic databases, any information can theoretically be replicated at will. This is why most governments allow only regulated actors to keep records of digitized assets (banks, depositories), to avoid pitfalls such as the execution of misleading transactions or the creation of artificial assets. With blockchain, these pitfalls can be avoided at the source code of the technology, which is available to all members of the network. The creation of Ethereum enabled a more robust blockchain network capable of “smart contracts”, which once programmed, can run automatically without the results being modified or manipulated.

 

Contrary to what some critics argue, the potential of the blockchain is not the creation of a free and unregulated space in which everyone can invent new financial instruments. Rather, the potential lies in creating a much more efficient and globalized commercial and financial infrastructure, in which many layers of control and intermediation are no longer needed as they are replaced by transparent and immutable IT rules that ensure the same risk management functions.

 

For example, bonds are essential financial instruments on which a large part of our economy and savings are based. The issue and exchange of a bond requires the intervention of several dozen financial institutions (issuers, intermediaries and investors). Some regulated players in this intermediary chain exist mainly to ensure that it is possible to know, at any time, who holds each bond, in order to guarantee their rights to its bearers.

 

It is theoretically possible to simplify these stacks of operators by linking them to a global blockchain network, open to all stakeholders in the industry. The blockchain network can thus ensure at any time that the number of outstanding bonds corresponds exactly to the number of bonds issued, and that each exchange transaction is carried out without the risk of default.

 

The blockchain revolution is first and foremost the reduction of costs and delays caused by the current financial infrastructure. The blockchain revolution also creates innovation opportunities for consumers, savers, and investors.

 

 

The Web3 revolution, often used to refer to the blockchain revolution, will be driven by the reduction in transaction costs, allowing the emergence of new peer-to-peer business models that we are not yet able to accurately predict, but which will probably participate in a rebalancing of the relationships between financial institutions and their clients. Some international peer-to-peer payment and loan-to-peer savings investment models are already attracting increasing interest from the most sophisticated consumers.

 

Where are we in 2020?

Today, the blockchain revolution is still in its infancy. Transaction volumes through blockchain networks, public and private, are low compared to those of existing systems. The fixed costs of the technology are still relatively high, and the user experience leaves something to be desired.

 

However, innovations abound. It is already possible for me, from my smartphone, to buy digital assets whose value is equal to about one US dollar, and to lend them in three clicks to other users who will pay me between 1% and 10% per year for this service, depending on the type of platform.

 

The number of large operational business projects is still small, but very promising. Numerous international commodity trading players have joined forces to create Vakt and komgo, two platforms that contribute to a significant simplification of trade and oil financing. Similar and competing projects, Voltron and Marco Polo, are being launched. On the corporate side, the Capbridge 1x platform (Singapore) already allows shares to be traded on an Ethereum blockchain network. Other important projects such as LiquidShare (France), SIX Digital Exchange (Switzerland), Daura (with Deutsche Borse and Swisscom in Switzerland), Synapse (Hong Kong Stock Exchange) are in preparation. The World Bank, Société Générale and Santander have issued bonds on an Ethereum blockchain network. These initiatives are still experimental but have attracted significant interest from financial institutions around the world.

 

And of course, many projects aim to revolutionize global payments by creating digital assets on blockchain networks that are fixed in Euros, U.S. Dollars or other currencies, such as those of the Monetary Authority of Singapore, the South African Reserve Bank, and Union Bank of the Philippines. Since the announcement of the Facebook-initiated Libra project, many governments have expressed concern about the possibility of private companies controlling global payment flows, and have asked their domestic financial institutions to redouble their efforts to explore competing initiatives.

 

All of this is to say that adoption is happening, albeit gradually. The middlemen and intermediaries of the financial world will not be replaced overnight. Moreover, the exact formation or architecture of the new financial system is impossible to predict with accuracy. However, it’s safe to say that blockchain will enable a financial system that is more efficient and yields more value-add to consumers, users, and investors.

 

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