Waves of technology change continue to reshape the global economy and have already given rise to high levels of innovation, and numerous promising opportunities, both in the UK financial sector and around the world.
Blockchain, the technology underpinning the Bitcoin cryptocurrency, is going mainstream, allowing goods and services are managed and distributed with greater efficiency. Accenture estimates that eliminating journaling transactions costs for business records and compliance purposes alone could reduce bank operating expenses 30 percent. Forecasts released this year put blockchain as a $20B industry in the 2020s, led by local and regional banking institutions. As with all technologies though, new risk, assurance and control considerations, as well as human capital factors, must be accounted for to counter potential vulnerabilities and denials of service.
Automation and mobile technologies too are feeding the de-emphasis of physical banknotes in the UK and much of the world. Tokenization, device-specific cryptograms and two-factor authentication allow contemporary mobile payments to provide business and security advantages beyond what some traditional payment methods offer. Financial institutions combine cloud services, cognitive computing, info security and voice recognition to reduce cost, provide new products and to reach, relate and reassure customers.
These advancements already have had a significant impact in the UK banking industry and in the global financial services sector – and will only continue to evolve in importance. Given the pace of economic change, disaggregation and reassembly of players, products and services, there is no steady state. With Amazon, Facebook, Google and others now deemed “fringe” players in financial services – surely soon to be full-on regulated competitors, there is no status quo. As Ashok Vaswani, CEO in Barclays Group UK, has said, banks are but “technology companies with a balance sheet.”
All technology-driven disruption necessitates forward-looking organizational leadership and governance, and appropriate investments in risk and security professionals. Balancing the investment ledger, across people, process and technology, will ensure the positive potential of technology is realized, and financial services innovations are achieved, today and tomorrow.