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A tech-tonic shift



Immense forces are squeezing and stretching the financial services industry.
Immense forces are squeezing and stretching the financial services industry and the banking and capital markets sectors within it.
Immense forces are squeezing and stretching the financial services industry and the investment management sector within it.
Immense forces are squeezing and stretching the financial services industry and the insurance sector within it.



The SQUEEZE

comes from today's consumers

Educated to expect great service by smart digital giants, they're pushing for the same from their banks and insurers.
The good news is their changed patterns of behavior are opening whole new markets.

The STRETCH

comes from rapid advances in tech

Robotics. AI. Cloud. FinTech. The pressure to digitally transform is coming from many directions.
Optimizing it all requires skills many businesses don't yet have.

What will you do?

Don't wait to be stretched and squeezed.


At Deloitte, we know how to harness the forces that are impacting financial services. Our deep understanding of consumers and your industry, complemented by cross-industry insights, means we can help you design, build and implement the tech for the customer journeys of tomorrow. Our experience in delivering end-to-end tech transformation at a global level means we can reach right into the heart of your operations.


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Our scale and skills can help you manage the complexity of change in financial services by:
Our scale and skills can help you manage the complexity of change in banking and capital markets by:
Our scale and skills can help you manage the complexity of change in investment management by:
Our scale and skills can help you manage the complexity of change in insurance by:

Re-engineering your technical and functional architecture


Enabling a natural fit with FinTechs and other alliance partners


Connecting to the right ecosystems so you can assemble new capabilities fast

The current state of financial services technology

The current state of banking and capital markets technology

The current state of investment management technology

The current state of insurance technology

With our broad expertise, we see Financial Services from many different perspectives. We can examine your tech transformation needs from a risk viewpoint, through a marketing lens, from a strategic standpoint and with an analytics angle. We can overlay all these elements required for tech transformation to give you a complete and clear path to success.

With our broad expertise, we see banking and capital markets from many different perspectives. We can examine your tech transformation needs from a risk viewpoint, through a marketing lens, from a strategic standpoint and with an analytics angle. We can overlay all these elements required for tech transformation to give you a complete and clear path to success.

With our broad expertise, we see investment management from many different perspectives. We can examine your tech transformation needs from a risk viewpoint, through a marketing lens, from a strategic standpoint and with an analytics angle. We can overlay all these elements required for tech transformation to give you a complete and clear path to success.

With our broad expertise, we see insurance from many different perspectives. We can examine your tech transformation needs from a risk viewpoint, through a marketing lens, from a strategic standpoint and with an analytics angle. We can overlay all these elements required for tech transformation to give you a complete and clear path to success.


Faced with great change, you can allow yourself to be squeezed and stretched. Or together, we can shape the future.

 

The core

To give customers frictionless experiences, you'll almost certainly need to update your core tech.


We're increasingly moving business models from legacy infrastructure on core processors to new, open, extensible platforms.


There’s plenty of tech to make this happen, starting with cloud and code refactoring. You can hollow out functionality — such as data and analytics — on to their own separate platforms. You can bring in new API and micro-services platforms for faster multi-channel integration. You can look at blockchain.


Once you have that core data and processing strength, you can build robotic process automation (RPA) and cognitive automation platforms, lending platforms, payment platforms, optimize mortgages, and reduce paperwork.

But, you need to define a deliberate core infrastructure strategy first.


Blockchain: the true game changer


In just two years, blockchain technology moved from being “educate only” to prototype, to production. It’s predicted to become more pervasive and will naturally play a bigger role in financial services.    


Its potential value as core tech infrastructure is exciting. It compresses decision-making time — for settlements, for payments, for investments. Blockchain eliminates the need for a trusted intermediary by making trust intrinsic to its shared operating system. As comfort builds around blockchain security, confidentiality, and regulatory controls, then the associated risks will be reduced.


Blockchain solutions will affect the way individuals and organizations interact, the way that businesses collaborate, the transparency of processes and data, and, ultimately, the productivity and sustainability of our economy. Blockchain infrastructure can support the digitalization of ecosystems and value chains by allowing faster and more secure ways for participants to transact and interact with each other. This function can fundamentally shift business models.


Trade finance is a one example where blockchain can transform processing time by eliminating the use of paper while ensuring transparency, security, and trust.


We can help you determine how blockchain fits into your business (or, perhaps, vice-versa).


The organization

Successful technology implementation will rely on organizations mobilizing and attracting the right talent, harnessing the power of data, taking the right path to automation and effectively using cloud tech. Easy, right?

We used to put it in warehouses. Now it gushes to fill entire lakes. Data is a disruptive force that can drive enormous insight and transparency, but without the right tools and techniques, it can just feel like you're drowning.


We’ve moved on from the issues around data recall and accessibility, where just getting good data out of silos and into an integrated form was the challenge. Now it’s fewer questions like, “How do we get it?” and “How do we manage it?” and more, “What is it telling us?” and “How do we leverage that?”


Data technologies not only help better manage risk and forecast trends, they now give organizations more insight about a specific scenario that you wouldn't have without exponential technologies such as cognitive analytics.


With the opportunities big data creates, together with the smarter analytic processes to help us act on it, data offers unprecedented ability to create value for financial services.


How will your current data strategy define your company's future?


Cognitive and AI: augmenting the workforce


Automation isn’t just smart, it makes total sense. Using machines to do critical analytics, governance, reporting, communications and other routine, predictable tasks allows humans to focus on more strategic, creative opportunities and more nuanced decision-making.


Increasingly, customers like and expect it. Chatbots, robo-advisors, cognitive digital assistants, conversational interfaces in mobile apps, Siri, Alexa — are all artificial intelligence (AI) enabled.


The reason these technologies are so talked about is they can leverage what the financial services industry is built on: information. They can help turn data into critical insights about customers and how your business should develop. And they will profoundly change or even commoditize many aspects of financial services.


RPA has been a very effective step change as it is not an invasive technology to implement. AI and cognitive technologies create structural change, where the power of cognitive adaptation almost rewires the tech unit to work itself. So these technologies have the power to transform, not just to improve, services.

How can you use these technologies to reshape and differentiate your business?


Cloud: the future is up there


In just a few years, Cloud SaaS platforms have become increasingly all pervasive in today’s workplace. Whether off-the-shelf or custom, cloud services deliver the agility, efficiency, connectivity, and impact expected, not just by your customers, by your workforce too.


And there’s a good reason for the rapid and broad adoption of cloud — it provides scalable services without incurring large start-up costs or technical debt associated with traditional information technology (IT) architecture and code maintenance.    


Navigating the pace and scale of cloud tech partners, and what gets put on the cloud because of the security and regulatory constraints are the main decisions to make for cloud implementation.


To what extent is your business already in the cloud? How much further could it go?


Tech talent: where are the puzzle masters?

How do you get all levels of your workforce technically competent, enabled, and digitally-minded, so you can really drive digital transformation and attract new talent at the required pace for success?


We see a big change in the workforce and the future of work, particularly the skills needed in core IT. It's complicated enough to manage and maintain these systems, but building a nimble workforce to create agile customer models is a next-level challenge. As minimum viable product (MVP) development becomes an everyday practice in financial services, there’s a greater need for people who really understand how to integrate systems.


Talent in financial services today requires true puzzle masters as part of your team—those who can see the big picture and connect the dots in tech-fluent ways. This means finding technical solutions architects who are fluent in the underlying architecture that supports platform configuration but know how to integrate code, drive efficiency and scale.


How will you build a tech-talent business culture that attracts the right people?



The customer and consumer

Consumers engineered to expect transparent and seamless experiences, cumbersome legacy systems and the rise of nimble digital-only start-ups make adaptation and differentiation a major challenge.

Consumers: the cloak of invisibility

Consumers are interested in financial services only as a means to an end. They don’t care about them as products in their own right. With this outlook, financial services will become invisible to consumers. They will buy and use them, but won't need to understand how they work. For consumers, things will become radically simplified.


In terms of investment, we see this being increasingly automated, as advice already has been. Investments will be made based on your profile, rather than you making deliberate decisions around them. Of course, the benefits of investment won’t be invisible, but the usage and management of them will.


When consumers see products as commodities, how do you stand out?



Customers: experience is everything

Whether corporate customers or individuals, their expectations have been radically shaped. Not by your competitors, or even really by new market entrants, but by the experiences they have elsewhere in their lives.


In a world increasingly influenced by today’s technology giants, customer engagement and experiences are increasingly being compared to interactions with these digital innovators. So there’s now an expectation gap between what a bank, advisor, or insurer can deliver and how they should deliver it.



This has to be a re-evaluation of what trust is. Most consumers are in ‘trust but verify’ mode. They don't trust brands anymore. They trust the experiences they have, and the experiences others have, which can easily be shared and compared. When a brand is a facade that can so easily be peeped behind for the truth, transparency is almost a given now.


What can and should your organization do to augment your trust values?


Customer-led tech: make it seamless

Seamless customer experiences are driving a material shift around the digital agenda in financial services. These experiences are increasingly built from a range of technologies including mobile app engagement, insight-driven AI, mass personalization, digital assistants, and the internet of things (IoT).


The more seamless and invisible your platform is, the bigger the market you can create, the bigger the ecosystem you can create.


How easy it is to become seamless depends on your starting point. If you start with major infrastructure, it's going to take a long time. If you start from scratch it may take less time to get there, but of course, you won't have as many customers to begin with.


How will you remove the seams from the experiences you give your customers?


Customer-led business: make your company matter

In some ways, technology and the change it offers is an embarrassment of riches. In the blurry new landscape — where companies cross sectors, where sector giants battle to retain (or regain) trust, where mandated data sharing puts customers squarely in charge of their own destinies — things are wide open. You could be all things to all people. That’s clearly an appeal in terms of scale, but is it a good idea?


A contrary outlook is to make your business matter by defining your purpose more concisely. There are many directions a financial services business can go in this open environment. Take banking for example: do you become a product specialist — the gold standard for mortgages, for checking accounts, or for credit cards? Or could you become dominant in a particular market segment? Small-medium business? Or Millennials? Or Agriculture — Rabobank in the Netherlands has chosen this path. Or do you become a utility?


When any company can play in any sector, where will you choose to go?



Regulation

Supervisors are encouraging competition, consumer choice and new entrants while also expecting impenetrable systems and effective technology risk management. Juggling these demands requires coordination of risk, regulation, and business strategy.

Constraint or catalyst?

Conventional business logic says that innovation helps drive competition, and more competition is good for consumers. So in general, regulators often encourage innovation. They are more interested in building compliance to modify behavior that could disadvantage consumers.


But, we are now entering a phase where, rather than simply allowing competition, regulators are encouraging it to flourish. This change in tack will have a very significant impact on the industry.


Opening the financial services industry’s competitive differentiators, customer engagement, and customer experiences up to consumer markets generally, fundamentally changes the existing business model. This effectively happens through mandated data sharing.


Since institutional banks can't react and respond as quickly as FinTechs, driving ecosystems through experience and partnering is one of the many strategies banks can use to stay ahead.


How is regulatory change opening up opportunities for your business?



FinTechs and alliances

Collaborate. Incubate. Accelerate. Working with the right start-ups and alliances will be vital to innovating at speed. So how do you choose the right ones?

In biological ecosystems, symbiosis is where two or more different organisms each offer something the other needs. The same is true in financial services.


For the most part, innovation is driven by FinTechs; nimble start-ups challenging the status quo, asking questions about how things can be better. But while they may be laying foundations for future disruption, FinTechs haven't materially changed competition. They’re too small.


FinTechs need the distribution model, the size and scale, the experience of operating in a heavily regulated industry and, of course, the customers of the big banks and the insurance companies. Banks and insurers need to learn about nimbleness and diverse thinking from the technologists to fundamentally change their culture and mindset.


These symbiotic relationships are growing into dynamic ecosystems, to serve customers in more targeted, more responsive ways. As there are only so many FinTechs and so many possible alliances, established financial services businesses need to be active in seeking best-fit partners.


How developed is your ecosystem? Do you have the right partners?



Technology in banking and capital markets

Technology in investment management

Technology in insurance

Financial services case studies

Banking and capital markets case studies

Investment management case studies

Insurance case studies

The collaborative culture of cloud

Enabling the insurance blockchain

Building the next generation of financial services technology leaders

Steering the ship of systems change

'B' is for better banking

A digital revamp powers national reach

Prospery: The digital private bank

Blockchain payments system to hit the main street

Using cognitive computing to create better billing

Beating risk with machine learning

Rebuilding Bank of Ireland as a truly customer-centric organization

Latest analysis in financial services

Latest analysis in banking and capital markets

Latest analysis in investment management

Latest analysis in insurance

How artificial intelligence is transforming the financial ecosystem

Double your intelligence: Using intelligent automation to double productivity in Finance

The future of operations – Beyond process automation

2018 global blockchain survey: Breaking blockchain open

Fintech by the numbers: Incumbents, startups, and investors adapt to fintech evolution

Beyond Fintech: A pragmatic assessment of disruptive potential in financial services

The next frontier: The future of automated financial advice in the UK

A journey through the FCA regulatory sandbox: The benefits, challenges, and next steps

Tech-tonic shifts are happening now. Work with a team of experts who help financial services firms adapt to, and take advantage of, technological change.
Tech-tonic shifts are happening now. Work with a team of experts who help banking and capital markets firms adapt to, and take advantage of, technological change.
Tech-tonic shifts are happening now. Work with a team of experts who help investment management firms adapt to, and take advantage of, technological change.
Tech-tonic shifts are happening now. Work with a team of experts who help insurance firms adapt to, and take advantage of, technological change.

Key contacts



Richard Widdas

Partner and Global Financial Services Consulting leader
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Scott Nicholass

Partner and Global Financial Services Consulting Technology leader
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Lauren Schmidt

Director and Global Financial Services Consulting Chief of Staff
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Richard Widdas

Partner and Global Financial Services Consulting leader
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Scott Nicholass

Partner and Global Financial Services Consulting Technology leader
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Rob Galaski

Partner and Global Banking Consulting leader
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Lauren Schmidt

Director and Global Financial Services Consulting Chief of Staff
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Richard Widdas

Partner and Global Financial Services Consulting leader
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Scott Nicholass

Partner and Global Financial Services Consulting Technology leader
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David Dalton

Partner and Global Investment Management leader and EMEA Blockchain co-leader
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Lauren Schmidt

Director and Global Financial Services Consulting Chief of Staff
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Richard Widdas

Partner and Global Financial Services Consulting leader
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Scott Nicholass

Partner and Global Financial Services Consulting Technology leader
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Arun Prasad

Principal and US Insurance Technology leader
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Lauren Schmidt

Director and Global Financial Services Consulting Chief of Staff
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