The competitors facing asset and wealth managers, banks, and insurance companies aren’t who we thought they were. Emerging technology is presenting growing opportunities for FinTechs.
And change is fast. The customers seem to be changing their minds about what they value most. For select legacy instituitions, this is a time of great opportunity. For others, it’s a sign of the end of an era.
Technology trends
It’s no secret that financial services has become a digital business. But the speed and extent of the transition is downright jarring. Artificial intelligence now drives the way leading firms provide everything from customer service to investment advice.
Blockchain, with its ability to store information on distributed ledgers without a central clearinghouse, could upend a variety of businesses.
Digital labor, or robotic process automation, is helping firms automate things they couldn’t do before, without having to hire an army of developers. And all of this depends on robust cybersecurity, to hold off threats that are coming from multiple directions.
Business trends
How business is conducted is shifting too. For decades, American firms have looked to the United Kingdom as the gateway to Europe, but Brexit could change this. Firms are focusing on jurisdictional analysis and what they’ll need to expand in the UK or move directly to the EU.
In the US, the regulatory environment will likely be affected by new appointments to the federal agencies and some targeted Dodd-Frank rollback by Congress. And as the industry grapples with risk management culture, ethics, and trust, it often finds itself playing defense.
Economic trends
The economic backdrop for these forces also keeps changing. Asset and wealth managers, banks, and insurance companies once primarily competed against their own kind. They still do—but now, they also face competition from nontraditional market players with skills, funding, and attitude.
And in a prolonged low interest rate environment, many now look at cost containment as one of the keys to survival. Finally, we see firms in a scramble for top line growth, organically and through acquisition, in a search for new revenue opportunities. Staying the same means falling behind.
Top 10 issues/opportunities facing Financial Services in 2017
1. Artificial intelligence now drives the way leading firms provide everything from customer service to #roboadvisor investment advice.
2. Blockchain, with its ability to store information data on distributed ledgers without a central clearinghouse, could upend a variety of businesses.
3. For decades, American firms looked to the United Kingdom as the gateway to Europe, but #Brexit could change this.
4. Financial institutions face competition from nontraditional #Fintech players with skills, funding, and attitude.
5. In a prolonged low interest rate environment, many now look at cost containment as one of the keys to survival.
6. Everything depends on robust cybersecurity to hold off threats that are coming from multiple directions.
7. The regulatory environment next year will likely be impacted from new appointments to the federal agencies and some targeted Dodd-Frank rollback by Congress, among other things.
8. And as the industry grapples with risk management culture, ethics, and trust, it often finds itself playing defense.
9. Digital labor, or robotic process automation, is helping firms automate things they couldn’t do before, without having to hire an army of developers.
10. Finally, we see firms in a search for new revenue opportunities, either organically, or through acquisitions. Staying the same means falling behind.
This full PwC report looks more broadly at these top issues facing financial institutions in the coming year.
For each topic, we look at the current landscape, share our view on what will likely come next, and offer our thoughts on how you can turn the situation to your advantage.
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