5 Key Disruptors In The Financial Industry
PSFK outlines five trends disrupting finance from our Digital Banking Playbook, a collaboration with Microsoft
As technological advancements continue to offer both opportunities and challenges across industries, banking and finance are no exception. With changes like the increased risk of data breaches, a wider breadth of competition and heightened consumer expectations, banks and financial organizations have to contend with a new set of rules for a digital-first marketplace. For our Digital Banking Playbook, developed in partnership with Microsoft, PSFK Labs identified five factors that are disrupting the financial industry and demanding that institutions adapt.
Speed of the Marketplace
Accelerated market speeds are placing increased pressure on financial institutions to respond rapidly to marketplace changes. The ability to analyze data in real time and accurately forecast outcomes, alongside having the right internal structures in place to act quickly, is becoming imperative for organizations to remain competitive.
The digital transformation of other industries—retail, hospitality, entertainment—is giving rise to mass customization at scale, creating an expectation for products, services and experiences tailored to a market size of one.
Increased Data Breach Risk
As growth in the number of digital transactions continues and banking infrastructures migrate to a broader range of platforms, financial institutions, and their employees and clients, face increased exposure to data breaches. Additionally, banks have paid $280 billion in fines since 2009, indicating an elevated need for more expansive, holistic security measures.
Rise of Alternative Banking Solutions
Slow innovation by traditional financial players has created opportunities for nimble startups with digital DNA to enter the marketplace. While many lack the scale of incumbents, a compelling mix of personalization, transparency and flexibility have positioned these companies as appealing alternatives to traditional financial institutions.
Balancing Innovation & Regulation
Heavy compliance issues and regulations imposed on financial institutions are obstacles to the pace of technology innovation enjoyed by other industries. Because banks have too high cost-income-ratios, they need to optimize cost in order to drive innovation. Organizations must learn to navigate these complexities and position themselves as category leaders to drive meaningful change.
The Digital Banking Playbook, presented in partnership with Microsoft, highlights how digital tools can augment a financial institution’s ability to optimize operations and reinvigorate the client experience. Download the free report here.
Lead Image: WTC Transportation Hub, astudio via Shutterstock
Before you start filling up your calendars with conferences to spark your business innovation and personal growth this year, add CXI 2018 conference to your wish list! For its 12th year running, PSFK is hosting an intimate conference where emerging pioneers and established experts will take the stage to discuss all things innovation around the new consumer experience.
Steven Dean is a designer, educator and entrepreneur focused on consumer health and wellness innovation. At his design consultancy, G51 Studio, he is involved in a broad range of projects that span business strategy, interaction and experience design, service design, and brand experience. He has designed and developed integrated user experiences for health and wellness platforms including mobile devices, networked applications and websites.
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