Digital Transformation Trends in Financial Services: What to Look for in 2021

Time will tell how the year 2020 is seen in the rearview, but one thing is certain: it wasn’t dull. The global COVID-19 pandemic altered everyone’s playbook for the year, and the impacts of remote work, online meetings, and social distancing will be felt for years to come. While it’s too early to tell what all of the long term impacts will be, topics that we covered in our blogs and white papers this past year give a good indication of topics and ideas that are likely to occupy our time in the year ahead.

Immediate Impacts on Financial Services

The impact of the pandemic was both deep and immediate, creating conditions not seen since the financial crisis that began in 2007. Business plans went out the window as some trends were supercharged by radically evolving conditions. We picked up on three of these developments in a blog in June: the success that collaboration tools delivered with the abrupt swing to work from home (WFH), the way that strains on customer service could be me with Google Contact Center AI (CCAI) , and the ability of flexible new technologies to be easily deployed for wholly new programs like the Paycheck Protection Program (PPP). On the whole, we found cause for optimism in the face of some very trying circumstances.

Distributed Ledger Technology (DLT) Continues Its Slow-Burn Build

For many, DLT (such as blockchain, digital assets, etc.) is the Keyser Soze of the financial world. Just like the oft-mentioned but never-seen character from the movie “The Usual Suspects”, DLT is purported to be extremely powerful but it has yet to have a real-world impact in the daily lives of financial institutions. 

That is changing, and our blog, 4 Distributed Ledger Technology Proof-of-Concepts Leading the Way Toward a Digital Future, looked at how utilization is moving from POCs to multi-party collaborations from the likes of Northern Trust and productized efforts in private markets (DTCC) and stock loan (OCC). A four-fold increase in the price of Bitcoin, the most well-established and accepted DLT, during 2020 is validation that the technology “works” and the above mentioned projects are a testament to the fact that broader commercial usage and acceptance have been hastened by the pandemic.

Taking Cloud to the Next Level

You’d have to have been living in a cave to have missed the increasing importance of cloud computing for all industries over the past several years. However, despite the power and possibility of cloud, financial services has been a laggard in adoption as a combination of regulatory complexity and industry caution won out over enhanced technology capabilities, increased security, lower costs and more. That reluctance had been waning prior to the emergence of COVID-19, and the shocks of lower revenues and a renewed focus on costs that arrived with the pandemic have served to further hasten the adoption of cloud in financial services. 

The promise of the ascendance of cloud was reinforced with the introduction of Atos OneCloud. This initiative delivers a holistic approach that blends technology and strategy to create a comprehensive roadmap for cloud adoption. By combining the best of technology with strategic insight, Atos OneCloud is able to take cloud to a new level and, as such, represents a further maturation of cloud compute capabilities. For financial services, it couldn’t come at a better time.

What the Future Holds for Financial Services

As hard as it was to anticipate what the onset of a global pandemic would mean to business and society, understanding the path forward from here is just as difficult to predict. What will it mean for bricks and mortar financial institutions? How will remote work persist and what will this mean for how and where business is conducted? And how will the technology trends that were accelerated by the pandemic evolve and grow? 

We are certain to see further increases in new technologies like CCAI, the emergence of DLT will spread and accelerate, and the impact of cloud will alter how and where financial services are delivered. Looking further, we expect a continued focus on cloud capabilities for AI / ML as these technologies have demonstrated that they can not only help to enhance customer experiences but also deliver in terms of improved business decisions in dynamic market conditions, elevated risk and fraud detection, and increase speed and insight in areas such as lending and insurance underwriting.  

Further, the events and conditions of the past year have both validated and accelerated the viability of cloud computing in all of its manifestations, and we expect that this will continue, particularly in terms of improving technology execution, increasing flexibility in compute consumption, and the ability to rationalize and limit investment spend in non-strategic investment assets.

In any case, it’s best to stay tuned and stay flexible as a dynamic situation continues to unfold!

Maven Wave helps drive the future of financial services with innovative business outcomes, fueled by cloud, with risk top of mind. To help organizations maximize economic outcomes and advancements, Maven Wave brings a rich blend of industry-specific technological expertise, agile-integrated design, and best practices for transformation. Contact us to learn more. 

About the Author

Andrew Dunmore
Andrew Dunmore
Andrew Dunmore is a Managing Director at Maven Wave, an Atos Company, where he heads the financial services and insurance consulting practice and leads cloud for the respective industry vertical at Atos North America . With nearly two decades of experience in a broad range of roles in financial services, Mr. Dunmore leads teams that deliver digital transformation for client partners in capital markets, banking and insurance.
January 14th, 2021
FINANCIAL SERVICES

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2021-01-14T14:09:35-06:00