Deloitte and WEF have recently published the last in a series of research reports into the Future of Financial Services. The series started in 2015 and has tracked the potential impact of technology on financial services. As with most 'future of' reports, not everything that is predicted becomes a reality. These reports are intended to stretch our thinking and challenge existing business models as we search for something better. Given that framing, the most recent report contains some real gold for leaders and strategists in the financial services industry.
A common thread of the research has been the impact of Artificial Intelligence (AI) in financial services. There is no denying the potential for innovation, possible as a result of large data sets, cloud computing and the maturing of data science as a business discipline, however translating this potential into value appears to be less clear for many executives. This report notes that “for many executives the link between developments in emerging technology and tangible business outcomes is still unclear” and identifies four pathways that can be explored further by both the skeptical executive and passionate technologist:
Each of these pathways acknowledges that we are now at a point of convergence (where a number of technologies are maturing at the same time), and as a result the gap between potential and clear outcomes is closing. Whereas in previous reports the case studies were more discrete, this report illustrates that success in the future comes through ‘combinations’. What we know about the most impactful innovations is that it’s all about the right combinations. This was so elegantly highlighted by Larry Keeley and his team at Doblin who identified this through their 10 Types of Innovation research.
Running parallel to the convergence is accessibility. Now, more than ever, these technologies are accessible, and in most cases affordable, providing innovation opportunities from start-up businesses through to established incumbents.
So, what does this all mean for New Zealand? From my reading, there are a few areas where I think we have a great opportunity to progress via a 'test and learn' approach;
As one of the senior Consulting partners at Deloitte New Zealand, I lead our Deloitte Digital and banking sector teams. I specialise in technology-enabled business strategies, focusing on financial services clients. I enjoy helping businesses develop and implement great strategies to help them achieve their business goals. While I admire great strategies, I have a lot more respect for those that can implement them. The world of business and technology is developing at pace, things that were once out of reach for many New Zealand businesses are now a reality. So to really take advantage of this, business needs to have a mind shift. Small is the new big - innovation is critical as the challenge shifts to how you can pull together the options that are now available to you. Well thought out strategies are great, the ability to execute is critical.
Hamish is a Manager within Deloitte's Operations Transformation practice, with a particular focus on business transformation and operations excellence. Hamish has worked with clients across public service, central government and the private sector.