Over 80 percent of UK-based financial institutions are investing in open banking and 90 percent of bankers expect it to increase organic growth by 10 percent. This monumental shift within the financial infrastructure of the UK is already having an impact on both businesses and consumers alike and the trend is not just a local one. In a recent report Gartner summarised what they believe to be the top financial trends of the future. Although these are not related to open banking specifically, it’s clear to see how some are a consequence of the technological changes and data sharing initiatives that accompany it.
Digitisation means companies need to hire for technological skillsets, as well as other related competencies. Both short-term and long-term human resource strategies need to be in place and this should include training programmes that help businesses remain agile and to adapt easily. Rapid technological change is a reality of the current financial marketplace and is set to remain as such. Only adaptable companies with the right talent will be able to serve it successfully.
Data is the fundamental principle that now underpins the whole financial sector. Open banking is at its essence a data-sharing initiative that creates a more competitive fintech landscape, simplifies and expedites banking processes for both individuals and businesses and provides insights that help in the development of customised products and services. Data and how it is used will be important cornerstones for the industry over the next few years.
Artificial intelligence (AI)
In such a data rich world, AI has the potential to transform the financial sector and can be especially useful when it comes to credit and risk assessments. Thousands of data points combined with machine learning are likely to be a key resource in a CFO’s toolkit. However, to avoid pitfalls and to select the right kind of fintech partners, the future CFO needs to have a certain level of technological understanding and competence.
Open banking has increased competition in the marketplace, enabling hundreds of third party fintech companies to leverage the data provided by traditional financial institutions. This is a positive development but with all this choice comes a more complex decision-making process for businesses when selecting which suppliers to work with. With many fintech service providers being new entrants to the market, assessing their ongoing performance and suitability is also going to be a much more intricate process requiring the input of multiple departments.
The future CFO needs to embrace technological change, employ the right talent and select fintech suppliers carefully. Innovation is just the beginning. The financial sector’s stakeholders will influence where that innovation takes it.