Rob, explained that this shift has happened so swiftly that for companies where “over half of the employers are traditional finance people […] and the other half are developers” a great cultural clash is presented for both sides. “There are people turning up in flip-flops and shorts, while others are having meetings with ties on being in important meetings with investors.”
As Rob mentioned, many employees still have a very traditional mind-set as well just as most companies that have been established decades ago do. Being complacent and ignoring the imminent technological revolution, asset and wealth managers might lose touch with their core clients. 2 So, what is the plan to overcome the hurdles of strong and young competition?
Moving from traditional to mainstream
Insights from PwC’s DeNovo indicate that 30% of consumers plan to increase usage of non-traditional Financial Services providers and only 39% plan to continue to use only traditional Financial Services providers. 3
As Zac said “can you actually imagine banks and artificial intelligence working together? It’s becoming our reality! Reshaping the industry seems like the most reasonable way forward”.
Take for example Goldman Sachs and JP Morgan – It was recently reported that they have invested in 15 and 9 different fintech firms respectively. 4
Goldman Sach’s also prides itself for employing more engineers and programmers internally (in New York) than Facebook” 5 said Rob.
If you think about it, when discussing giants such as Goldman Sachs and JP Morgan investing millions in innovation and technology, you can’t stop but wonder: is this industry of evolution resulting in an oligopolistic market that only the few can get their hands on? Xavier concurred, stating that many start-up CEO’s specialise in “taking something off the ground and selling it” which in the end ends up being absorbed by bigger corporations.
Seeing things moving so fast in the finance world, what changes should we expect to see in a few years? Zac described that Artificial Intelligence is already playing an instrumental part in everyone’s lives and will continue to evolve in the coming years. An example of that is that “today, some 70% or more of all trading is done via computers and algorithms.” 6
Benno also agreed by saying “we will see a lot of things becoming more automated and a lot of smart plumbing coming in. Even Facebook and Amazon are considered financial institutions in their own right nowadays” posing a threat for other finance companies. Financial Times stated that Facebook “already enables users to send money to each other in its Messenger app, and reportedly will soon add remittances to businesses. As David Parker, head of banking at Accenture (UK and Ireland) said “the days where a single channel for financial services was controlled by banks are coming to an end”. 7
As Financial Industries and Fintech companies are coming closer together, the impact of seamless functions and services being implemented will eventually change the face of what we now perceive as “a finance institution”. In the meantime, the most important thing is to constantly invest in knowledge, ignore stereotypes and traditional functions that keep companies in the past, but instead embrace the bright future ahead.
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