Trends in Financial Services – Catching the Next Big Wave
The Shifting Landscape
Financial institutions today recognize the need for change. The market has shifted and the challenges are greater than ever. Customers demand higher standards of service, proven experience and total transparency. Channels need to be revamped and in many cases developed from scratch. The proliferation of continued low interest rates demand new cost structures. Tighter regulation requires more controls.
There is less appetite for risk. From highly leveraged balance sheets and opaque markets there is a shift to fortress balance sheets and transparent ones. Over-the-counter (OTC) markets are giving way to exchange traded ones. The mantra of the new marketplace is safety and soundness.
All of this implies massive transformation as the industry moves to new business and operating models. Mega Trends are driving changes across multiple fronts. Big Data, Cloud, Social and Mobility solutions facilitate this transformation by providing greater transparency with respect to customer needs, business performance and operational excellence providing a new platform for converting data and insight into opportunity through collaboration.
The Power Potential – Leveraging Big Data, Cloud, Social and Mobility
Financial institutions make money by leveraging information. But one of the most under-utilized assets in financial institutions is their own data – the envy of a Google or an Amazon. Yet for most financial institutions today this data is fragmented, siloed and difficult to access let alone monetize.
Consumers are overwhelmed with communications – statements, offers, brochures often in paper form. Digital offers invade our websites and infiltrate our firewalls. This ‘spray and pray’ approach produces low returns, creates irritation and in paper form costs a lot. Postage alone can run to millions of dollars. Giving people the right to opt in or out of offers; tailoring those offers to individual needs; giving consumers the content they want when they want it in the form they want it – that’s the value the technology can provide.
The massive proliferation of devices has led to a huge increase in data. As a result more data has been created in the last few years than in the history of mankind. For many of us this is more than we can possibly absorb. Big Data is growing not just in volume, but in velocity and variety. Traditional database management systems just can’t cope. This data has the potential to be incredibly valuable to financial institutions by providing new clues to customer preferences, risks and opportunities. Business can be managed more efficiently if only data can be managed more effectively.
The cloud offers us the ability to store and compute anything, giving us the tools we need to manage all the data we can absorb at a fraction of the cost of on-premises solutions. Agile and flexible it becomes easy to absorb massive amounts of data and share it with those who need it most. It isn’t just marketing and risk management that benefit, but every area of operations will see efficiency enhanced.
Productivity gets a further boost from social computing. The way we learn, develop and attract new skills is changing. We don’t have time to sit in class rooms anymore. Even the skills we acquired a year ago need refreshing. This forces us to learn more from each other. Business has shifted from rugged individualism to millennium-driven collaboration.
Mobility is also transforming how we work and service customers playing a critical role in attracting the tech-savvy consumer. Banking channels are being redefined and the mobile channel is by far the fastest growing. The second screen is also ideal and can service as a platform for social media integration, allowing interaction with users on Twitter or Facebook, to comment on what’s happening live, and to entice clients to participate in polls or contests.
Catching the Wave is a Process
What many financial institutions have not yet realized is that “catching the next big wave” is a process. It is one that leverages existing assets and information and combining them with powerful new tools, platforms and smart devices. For the financial services companies that get it – the opportunity to dramatically pull away from the competition and increase marketshare will be significant.
The Microsoft Advantage
These are exciting times for financial services and technology companies. The challenges are huge but so are the benefits. Technology is dramatically changing and in turn is transforming the world. In this new environment, it’s the individual not the institution that wields more power. The aftershocks are taking both industries to new places creating more focus on customers, leaner and more agile operating models and a radically different approach to technology.
Microsoft is helping financial institutions navigate the inflection point of economic recovery, regulatory requirements, customer expectations and dramatic technological change by helping to leverage and understand the potential of the Mega Trends: Big Data, Cloud, Social and Mobility and how these trends can be harnessed to deliver compelling business transformation.
Learn How Microsoft is Helping Financial Services Transform
Download the White Paper “Surfing the Waves Together” for Financial Services Organizations. Learn how some of the largest financial services organizations have “caught” a wave to the next evolution in excellence.