INTRODUCTION
CFOs foresee a lot of change in financial analytics, technology, and processes to support corporate development, but new trends are likely to influence their top objectives.
The ten trends that will shape finance in the future are highlighted here. For the finance organization as a whole, there is no rank order, but each could have a significant impact on organizational structure, personnel, technology, and procedure.
1) Finance analytics' (Re)centralization
Many organizations are moving financial analytics into scalable centralized models under the control of a finance Centre of excellence (COE) as finance looks to cut expenses while enhancing analytical insight.
For instance, hub-and-spoke arrangements put the finance COE at the Centre, where data scientists are in charge of data mining, collection, synthesis, and modelling.
Beyond that, Wilton explains, "sit activities more related to specific business lines." "Those Spokes'' handle tasks like project scoping, formulating analysis-related problems, converting analysis to business terms, and delivering presentations based on the analytics," the article states.
2) demand for data that is ready for decision-making
Allow governance to be delegated to data owners as needed, as opposed to using a centralized, one-size-fits-all model. This aids the finance division in preparing data for decisions rather than focusing on correctness and precision.
In practice, this entails adapting financial governance principles for non-financial performance data, establishing the relationship between financial and operational data, and fostering trust in internal reporting by combining highly governed and intuitive data. Additionally, it needs to offer chances to concentrate data quality enhancements on regions that offer the most economic advantages.
3) Banking Clients Will Disclose More Personal Information
Consumers are more willing than ever to grant FSIs access to their personal data in order to receive digital offerings that are suited to their unique needs.
It's interesting to note that customers are also increasingly eager to divulge information about themselves, including sensitive information about their preferences, non-financial personal information, internet behavior's data, information about their transactions with other FIs, and information about their professional lives.
The most obvious of these is the client data that banks currently hold. In addition, banks have access to data from a nearly dizzying array of internal and external sources.
4) Partnerships between FinServ and Fintech Will Continue to Drive Advances
Technology advancements are already driving all of these changes, to the point where FinServ and fintech are frequently used interchangeably in everyday speech. The truth is that fintech can give fin servs—which have failed to make the technological advancements necessary to serve customers—more capability.
In previous years, trend articles discussed banking corporations acquiring fintech companies, but in actuality, partnerships are more prevalent. As a result, it will continue to be difficult to integrate product lines, customer data, and ensure that customer service agents have access to information throughout the company.
To provide clients with highly customized products and specialised customer service, FSIs can use AI and machine learning to make sense of the diverse data held across multiple repositories.
5) intensifying security
Over the past few years, as remote labor and digital transactions have risen, so too have the risks associated with fraud and cybersecurity. In accordance with a research from Flashpoint's Risk Based Security section, "as of Dec. 9, finance and insurance entities across the world experienced 566 data breaches, which has so far amounted to over 254 million leaked records." After taking note, regulatory bodies like the SEC, FFIEC, and FTC released revised guidelines and regulations to urge businesses to implement best practices in information security and cyber event reporting. Security must be a top investment priority for financial services companies in 2023 and beyond.
6) Boost back-office productivity with automated processes and seamless connection
By automating crucial procedures, integrating systems, and shifting the tech stack to the cloud, financial services organizations are modernizing the back office. These changes are intended to increase productivity, reduce expenses and vendor footprint, and allow institutions to expand their businesses with less resources and fewer employees. Organizations must take important actions to enable them to compete in the digital-first economy, including integrating systems and reducing manual operations.
7) Increased Use of Personal Finance Apps
Personal finance app downloads increased by almost 90% during the pandemic.
The popularity of financial apps like Mint, Prism, and Every Dollar skyrocketed because they offered exactly what customers were seeking for.
These apps provide options to invest in stocks and cryptocurrencies in addition to helping individuals manage their finances.
People particularly enjoy having the ability to virtually govern their entire financial world from the palm of their hand.
This number will probably rise as the US implements open banking, which will make financial apps even safer. Additionally, users with security reservations might be encouraged to take another look.
8) Blockchain is accepted by the financial services sector
Blockchain technology has long been associated with cryptocurrencies. However, analysts predict that technology will now merge more fully with current banking institutions.
For instance, utilizing blockchain would enable banks to carry out transactions more inexpensively and effectively while retaining high security.
It can also manage peer-to-peer lending, a sector that is expected to increase by up to $150 billion by 2025.
In 2023, more banks will be moving their operations to the cloud, and blockchain will undoubtedly be a part of this.
Blockchain technology is already used by HSBC and Wells Fargo to settle currency trades.
Users can use blockchain currencies to transact on the networks of JP Morgan, Mastercard, and PayPal.
Naturally, this involves cryptocurrencies, but also demonstrates banks' readiness to accept blockchain.
Blockchain is being used by more than just banks, too.
When offering its customers flight delay insurance, the French global insurance business AXA leverages blockchain technology.
The insurance contract and air traffic information are then linked using an Ethereum blockchain.
The technology takes note when a flight is more than two hours late and initiates the insurance reimbursement right away.
Conclusion
Traditional financial methods are clearly being abandoned.
The world is becoming more digital, as expected.
Customers are interested in mobile banking, financial services are looking at the cloud and the blockchain, and cryptocurrency is being studied by everyone. Being in the financial services sector at this time is thrilling.
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