Trend No1: Wearable payments: “As cash payments steadily reduce (look at the Nordics), we expect wearables to grow as a payment method, as they already offer a convenient mechanism for replacing cash in low value transactions.
We are seeing wearables increase in functionality and reduce in price, making them more of a widespread platform for consumers to use when making payments. When smartphones first emerged, most analysts thought that the penetration would stay low. What changed that was significant improvement in functionality, performance and price point, and the same will happen with wearables.
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“Moreover, we expect traditional phone functionality will appear in wearables (such as with Apples new iWatch, which incorporates both GPS and its own SIM card) and will allow for better authentication of users (for example with Voice biometrics).
When it comes to security of mobile payment devices, smartphone cameras will be the next wave for Face and Finger biometric authentication. Smartphones are already beginning to incorporate secure chip functionality that can be as secure as any chip and pin card, and wearables are likely to quickly follow, as these can securely store account details and biometric templates for authentication.”
Trend No2: Drive towards efficiency and agility: “Given the drive towards efficiency and agility, next year we expect a lot of jobs to be created in the areas of automation. Gartner has predicted that by 2020 Artificial Intelligence – which will drive the next wave of automation – will be a net job creator. The impact we will see on the labour market as a result, is that more and more people will be employed to develop and implement AI based automation solutions, and this will overcome the number of people in jobs that will be replaced.
In fact, out latest research found that 71% of businesses are concerned about their ability to adapt to AI. AI will not only replace existing manual processes, it will create new ways of doing things, which subsequently will create new value for businesses and their customers.
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By GlobalDataThis is closely coupled to Big Data and IoT technologies. If you are a specialist in RPA, AI, Data Science / Analytics or IoT, you can expect to be in high demand in the financial services industry for the next few years.”
Trend No3: Cross industry mergers and acquisitions: “Economies are no longer dominated by a particular industry – as America once was by manufacturing for example – but instead we’re seeing technology platforms (Google, Amazon, Facebook) having bigger stakes in western economies, cultures and, at times, politics through the acquisition of trusted names in particular sectors. When thinking about digital disruption, this year’s prime example has to be Amazon’s acquisitions of the US high street grocery store Whole Foods Market, which rocked the retail establishment.
I think this is very likely to happen in the financial services space as well given we’ve already seen the likes of Apple and Samsung lay foundations in the industry with their mobile payment apps.
It will give organisation like Amazon instant credibility in this space, and a firm base to implement its philosophy, culture and technology. Given the UK’s significant standing in the financial sector, it’s a prime location for investment. For any technology company looking to make strategic acquisitions, they stand to reap the benefits of a diversification in their global portfolio. Any acquisition is very much likely to be centred on the retail or consumer financial services space.”
Trend No4: Further consolidation in the industry for the established players: “I think there will be more consolidation in the industry for the established players. As core areas are increasingly undermined by digital disruptors, organisations will increasingly look for economies of scale through consolidation, and higher margins through specialist offerings.
This trend is likely to be most greatly experienced in the insurance space. As a result of the rise of automation, it will help create jobs for those with skills in specialist areas of underwriting and those who have a good track record for quickly assimilating and automating acquired businesses.”
Trend No5: GDPR compliance : “GDPR could have a big impact on financial sector players next year – but I expect it will be no different to Y2K – lots of concern but very little initial impact – but the first big data breach will bring GDPR back into sharp focus. Data breaches now happen every day. Take the Equifax data breach for instance.
Had the GDPR legislation been in place already, Equifax would have incurred a significant fine – up to 4% of their global turnover. From a jobs perspective anybody with good skills around privacy management, data management and cyber will be in high demand in this GDPR fuelled world.”
Ian Bradbury is CTO for Financial Services, UK and Ireland at Fujitsu
