The financial services industry has spent the best part of the last decade implementing a new regulatory framework, designed in response to the financial crisis. As the wave of reforms move fully into the implementation stage, the next big trend the sector faces is digitisation.
The growth of Financial Technology (FinTech) over the past few years can be seen via the number of venture capital deals in the sector, to the development of innovation centres inside existing established firms.
The digital disruption of financial services has the potential to transform the industry over the next decade. New technologies brought to market by start-ups will lead to market disruption across insurance, banking and wealth management, creating increased competition. Some of these market disrupters have already arrived.
It will also lead to a new customer relationship. Technology will provide financial services firms with new ways of offering products that focus on user experience. Those firms that don’t offer this new user experience will suffer from increased competition. Other areas of the economy which have already experienced the force of digitisation, such as the music industry, illustrate that there will be both winners and losers.
The WEF Global Risks Perception Survey 2015 asked respondents to assess the likelihood and impact of individual risks on a scale of one to seven. Only one technological risk scored above average, cyber-attacks. Although respondents noted other technological risks, such as adverse consequences of technological advances and data fraud, they are not regarded as top priority.
The emergence of FinTech is both a threat and an opportunity to the sector. This presents a challenge for both the industry and regulators. Accurately identifying the difference between the two will be one of the key on-going challenges in the years ahead.
The following report analyses in greater detail the scale of the challenges facing all areas of the financial services industry, and the implications for regulators and policymakers. Digital disruption also offers business opportunities for those firms that are agile and can harness its power in the context of existing organisational structures. These opportunities will also be discussed throughout the report.
Since the underlying technologies which threaten to disrupt financial services cut across all areas of the sector, the report will proceed thematically highlighting the impact to insurance, banking and wealth management throughout. The report is split into four sections, they are:
Section One – Implication for politics and regulation
Section Two – Implications for established financial services firms
Section Three – Implications for FinTech start-ups
Section Four – Implications for consumers/general public
We hope you find our latest report eye-opening about the future of financial services, and gives you an insight into what awaits the industry in the coming years.
Download the complete report here: http://appgfintech.org.uk/wp-content/uploads/2016/08/CII-Report-disruptive-influences-2-fin-tech.pdf