However, these institutions have long been dubbed laggards when it comes to technology, innovation, and the speed at which they can digitally transform. Much of this is due to the legacy infrastructure in place, the regulatory landscape in which they operate, and security and governance protocols they have been hamstrung by. This means that data is not driving the valuable innovation it can do to improve automation, decision-making and risk management.

In comes synthetic data. This is not ‘real’ data created naturally through real-world events. It is ‘artificial’ data that maintains the same statistical properties as ‘real’ data, generated using algorithms. Whether the aim is to make data available across an organisation or accessible to third-party partners it drives speed to innovation within financial services.

This is already happening as the first banks start to roll out synthetic data across various use cases, from testing to AI model training to cloud migration projects. But in 2023, I believe the sector will open its eyes to the notion of synthetic data and how it can fuel growth, support overcoming longstanding obstacles, and totally rejuvenate the way financial services institutions meet and exceed the ever-evolving requirements of customers and regulators.

Revolutionising data privacy 

According to Gartner, synthetic data will enable organisations to avoid 70% of privacy violation sanctions. Financial data, such as consumer transaction records, account payments, or trading data, is sensitive personal data subject to data protection obligations and is often commercially sensitive.

Structured synthetic data has the potential to revolutionise the way financial institutions use data securely. Because this data preserves the statistical properties of real-life data, the strict privacy and security protocols that have previously blocked innovation can now be navigated with synthetic data. So, because no real individuals can be identified from the synthetic data, data protection obligations, such as GDPR, do not apply. This will undoubtedly be top of mind in 2023 for business leaders, with the fifth anniversary of GDPR in May.

Since privacy compliance and information security regulations will no longer be an issue, the new artificially generated data can then be used to create new revenue streams. The banking sector can take their Open Data and data monetisation strategy even further in 2023 since synthetic data will enable them to package this data and sell it to third parties without the need for express consent.

Seamless cloud migration

There’s no doubt that the organisations that are succeeding in these trying times are those that can rapidly scale via the hybrid or public cloud. But well-regulated industries like banking and financial services have been reluctant to go all-in with the cloud. I get it. As soon as data leaves the company campus and servers, the control is lost. Synthetic data allows for a rapid, cross-organisational migration to the cloud without any of the added risks. Something that financial organisations can use to great effect in 2023.

Instead of pseudo-anonymised data (created by traditional processes such as masking and anonymisation) that can still lead to re-identification or redacted data that loses most of its utility, with synthetic data generation, the dataset is totally new and holds no ties to the original. If used, in 2023, financial services can train on their real datasets on-premise – even behind the walls of separate departmental silos. Then, the artificial data can be released into the cloud. And since there’s no personal information in it, the synthetic data can be shared across silos within the organisation — allowing for cross-organisational strategy, insights and analytics like never before.

The commercial impact of generative AI

Generative AI underwent a huge step change in the latter half of 2022. Teams from OpenAI through to StabilityAI have been creating models that can conjure hyper-realistic text and images from seemingly thin air with very minimal verbal prompts. The realism of the responses you can get from these models is in some cases quite creepy and like nothing we’ve seen prior to this year.

So how will this development impact business and society? The jury is still out, but what we do know is that these teams are making these models available for anyone to play with for free right now creating the perfect test ecosystem for developers, hackers and anyone who’s curious to test their ideas.

I am certain that in 2023 we will start to see businesses forming around these tools. For example, there are already examples of text or formula auto-completion tools being embedded into Microsoft Office software that could greatly improve productivity and speed up learning curves of users. These types of efficiency-improving tools have the potential to impact businesses much further afield than just financial services.

There are certainly some concerns and legal challenges that still need to be overcome before this technology can be commercialised. Who owns the output of one of a code auto-completion model if it was trained on data under different licences? Who owns the copyright to images generated from a model?

Despite these challenges, there is huge potential in this technology, and I believe we will all be hearing much more about it in 2023.

The move from one of the UK’s largest banking groups, Lloyds, is a prime example of how the industry is adapting to consumer trends and the shift to online banking. Statistics show that in 2007 around one-third of consumers used online banking. Today, more than 90% of consumers conduct most of their banking needs online.

This shift in behaviour has gradually changed the industry, but it is clear that the future of the financial services industry is digital. However, the closure of bank branches has forced a seismic divide between those who prefer to bank online and those who don’t. It has also raised many questions about the readiness of our high-street banks when it comes to supporting this divide and future-proofing services.

Amid these branch closures, how can banks ensure that they are supporting all customers, both online and via the high street?

It’s true, not all consumers are willing or capable of making the digital change, and there will always be those who prefer to bank manually. As banks continue to accelerate their digital transformation, the closure of more high-street banks is inevitable. As a result, those who prefer to bank in person could be left in the dark when it comes to managing their finances.

We’ve seen some banks providing hands-on support at their branches for those unable to access digital services at home. This approach has helped to improve accessibility and increased education around digital initiatives. It has also encouraged increasingly more people to embrace digital ways of banking. The industry and regulators are also focusing on introducing plans to support those who are less digitally experienced.

What are some of the initiatives that the industry and regulators are putting in place to support those who prefer to continue banking via the high street?

Recently, a pilot agreement was launched for banks to share services to support the local community and the future of cash. Large banks across the UK will assess local needs every time a branch closes. The assessment could recommend a shared branch opens, an ATM installed, or a Post Office is upgraded. Banks will commit to delivering whatever is recommended to support those customers who prefer to bank in person.

What’s more, the Financial Conduct Authority has proposed that banks will have to provide a more detailed analysis to justify closing a branch. The FCA will also have the power to ensure local communities across the UK have access to cash and banks who don’t comply could face fines. This will make sure that in those areas where digital adoption is not common, access to physical services will remain a priority for banks.

These are promising initiatives, but the industry must do all it can to ensure these initiatives are widespread. It must also continue to think outside the box, innovate and develop other initiatives aimed at those reluctant to embrace digital banking.

How can banks focus on innovating and continuing to improve and develop the digital customer experience, while catering for all customers?

There is no denying the dramatic shift in consumer behaviour to digital. This should be taken as an opportunity for banks to future-proof their services and improve the online customer experience.

However, the extensive use of legacy technology within banks, means the speed at which these established institutions can bring new services to life is often too slow and outdated. This challenge is also complicated by a lack of industry standards, meaning that banks continue to be restricted by having to choose partners based on their language and the way they’re able to transform the bank.

To truly digitise banks, they need to overcome these obstacles surrounding interoperability with a coreless banking model. This approach to transformation empowers banks to select the software vendors needed to obtain the best-of-breed for each application area without worrying about interoperability and being constrained to those service providers that operate within their own technical language or messaging model. By translating each proprietary message into one standard message model, communication between different organisations is, therefore, significantly enhanced, ensuring that each solution can seamlessly connect and exchange data.

Are there additional approaches that banks should be considering to further enhance the customer experience?

In addition to taking a coreless approach to banking, banks must form an ecosystem alongside FinTechs, service providers, and aggregators. This will help banks when it comes to the speed they can introduce new products, which in turn will support the customer experience.

An effective ecosystem strategy will make banks more relevant to their customers, creating an opportunity to drive better relationships and bigger wallet shares by providing the speed, scale and differentiated products that make the most of the opportunity presented by the significant shift to digital banking. If banks fail to take this approach, they will struggle to survive as consumers continue to demand new, digital services aligned to their needs.

So, what can banks do to prepare for the future and make sure they are providing for all customers?

While we anticipate that there will continue to be more high-street branch closures, the industry must continue to adapt based on the needs of every single customer. Failing to do so only means that customers will leave for a nimbler competitor who understands the customers both now and in the future.

This may seem like a hard weight to bear for many across the sector. By taking a core banking approach to transformation, however, supported by an effective ecosystem – banks will benefit immensely. If banks continue to focus on the balance between maintaining previous methods of banking and the development of new and innovative services based on the needs of every customer, the future will be bright.

AD 69 was the year of Four Emperors in Rome – contenders for the Imperial Purple successively bidding the Praetorian Guard for the right to lead the Empire. The speed at which the Boris regime unravelled in July was shocking enough, but there was something redolent of Imperial back-stabbery in the way his potential successors immediately began bidding for the Dispatch Box with promises of tax cuts and balanced budgets to appeal to the 200,000 odd Conservative Party Members who notionally determine the next party leader and hence the next Prime Minister of the UK.

Much mud was slung between the contenders with accusations of every kind of chicanery – but amid the promises, threats and personal attacks, there has been precious little discussion of policy and plans to make the UK fit for purpose as a modern, stable, competitive, and fair economy. Instead, the choice boils down to a hard Brexiteer vs a we-simply-don’t-really-know Brexiteer – who will each try to appeal to the party vote on their anti-European credentials.

Determining how to put the UK on the right economic course is critical. We need a plan that addresses micro and macroeconomic issues – not political slogans; outlining the key objectives necessary for the UK to remain relevant in the modern Global Economy and how we get there.

There is absolutely no reason the UK should not succeed. Many of the key parts are in place. Our national finances were strained, but not irretrievably damaged by the pandemic. The economy is functional. There are wage inflation strains – that can be addressed. We remain a wealthy, diverse and demographically advantaged nation. The UK is strong in terms of global soft-power – and still punches above its weight in terms of military strength. The danger is that our increasingly factionalised and populist politics remain unfocused on the key economic issues to solve. These are essentially simple – and I’m sure the strategists in Treasury have already got the plans on file ready to hand out to whoever wins:

• Addressing the immediate issues of inflation, debt and growth.
• How to improve national productivity, promote invention and stimulate the innovation of new industry and business.
• Coping and paying for the threat of a global recession.
• Reopening trade with Europe to mutual advantage.
• Re-establishing energy and food security across the region.
• Addressing new threats – like a renewed refugee crisis.
• Putting in place an effective and costed energy transition policy that addresses growth alongside ESG.
• Reforming the business of government; balancing budgets, reforming the NHS, improving education and defending the nation.
• Build a more equitable society by providing social care & support, while ensuring equality and social justice?

The issues to solve range across the micro and macroeconomic spectrum - policies to boost productivity, invention, and innovation, facilitating trade and export growth, optimising tax structures, securing micro and macro funding structures, determining and funding the changing role of state and maintaining the UK’s soft and hard geopolitical power in a constantly changing world. Simples. They are long-term objectives, and all of them could be done with enough political willpower.

Boris’ swift tumble from grace will become another footnote on how all political lives are doomed to failure – and the reasons will merit little more than a footnote in the history books.

Politics is the business of being elected and staying elected. Since Brexit, making the country actually work has been somewhat neglected. Populist politics and polarisation have dominated the agenda. Even though the Tories were left internally riven by the referendum, they had two key vote winners: i) Jeremy Corbyn, the left-wing leader of the Labour party horrified many natural Labour voters, and ii) a popular populist leader in Boris Johnson who exploited his personal popularity and Corbyn’s unsuitableness to win a landslide in 2019.

Boris’ swift tumble from grace will become another footnote on how all political lives are doomed to failure – and the reasons will merit little more than a footnote in the history books. But post-Boris, the brutal reality is there are no more excuses. Conservative Politics have to deliver. The problem for the UK is there are some topics which the Conservative Party simply can no longer address or even discuss without immediately self-immolating. It has become factionalised. Either the Conservatives sort their internal division, or we need a new government pronto.

The key issue is Brexit. Six years after the Leave vote, it is still impossible to answer the “Webster Question”: Name a single thing Brexit has made better? (Full disclosure – I voted to leave.) Brexiteers will cite the UK’s swift pandemic response and the AZ vaccine – but that’s a one-off highlighting just how good the UK can be when we put our minds to it! For all the talk of opportunities, new trade deals, and money flowing back into the economy from Brussels – the only real thing Brexit has delivered thus far is hardening antipathy with Europe. Not a single major trade deal outside Europe has been agreed upon. Terms of trade and travel with Europe have got increasingly worse.

The right economic response would be to find a compromise with Europe to solve trade issues and increase trade flows – mutually beneficial. In an era when global supply chains are in flux, inflation is rampant, where energy and food security are under threat, the UK needs access – not blocks. Yet, none of the Tory contenders will dare talk about “that which cannot be named”: the UK’s ongoing relationship with Europe. To even mention a Brexit rethink or a more constructive dialogue with Brussels – is Conservative suicide. Such talk would drive the European Reform Group into apoplexy. The Brexit Taliban’s idea of engagement with Europe is to immediately refuse it. No Tory contender can dare upset them.

The second issue is the NHS. It is Europe’s largest employer and consumes state resources at a furious rate. It is becoming the black hole at the core of government spending. The Tories know to mention reform plays into the hands of Labour to accuse them of wanting to privatise the much loved (but hopelessly mismanaged) national darling – so Tory policy is to simply feed it more cash and leave reform to the next government.

Reforming the NHS can no longer be put off. Government pensions – of which the NHS is the largest part – are going to cost more and more, fuelled by inflation. It has to be reformed, made fit for purpose, and that means a new solution that rewards staff and meets the needs of patients at an affordable cost. That’s the real business of politics – making tough and hard decisions.

Around the world, cryptocurrencies are coming under regulatory pressure, but some exciting developments have come out of the UK in the past few weeks.

The British Treasury announced that it intends to bring stablecoins under the Financial Conduct Authority's (the UK regulator) remit if used for payments as part of a broader plan to make the UK a hub for digital payment companies.

In January of last year, the British Treasury consulted on whether and how it should regulate crypto assets. Given that stablecoins have a stable value linked to traditional currencies or assets like gold, the Treasury's view that they have the potential to develop into more mainstream usage; therefore, regulating stablecoins would ensure they are used safely by the public.

The FCA has come under widespread criticism in recent months for stifling the innovation of FinTech – an industry in which the UK supposedly wants to be a leader. But as crypto is quickly becoming more widely adopted, delays in implementing regulation is causing the UK to fall behind on this ambition. For example, in the US, stablecoins are already being used to facilitate trading, lending, or borrowing other digital assets. As a result, they are moving to craft regulations to support faster, more efficient, and more inclusive payment options.

The move to regulate the industry comes at a crucial time for the UK economy. Rishi Sunak, Chancellor of the Exchequer, said in his statement:

"We want to see the [cryptocurrency] businesses of tomorrow – and the jobs they create – here in the UK, and by regulating effectively, we can give them the confidence they need to think and invest long-term."

What is the proposed regulation?

While no official regulation has been published yet, the British Treasury published a response to consolidation and called for evidence, which considers the following:

• An amended e-money framework that can deliver a consistent framework to regulate stablecoin issuance and the provision of wallets and custody services.
• An amendment to Part 5 of the Banking Act 2009 to include stablecoin activities to apply in cases where the "the risks posed have the potential to be systemic, and so the threshold for the Bank of England supervision is met".
• An amendment to the Financial Services (Banking Reform) Act will mean stablecoin-based payment systems will be subject to appropriate competition regulation by the Payment Systems Regulator.

What does this mean for crypto in the UK?

Establishing a regulatory environment for stablecoins used as payment allows market entry to support innovation while ensuring regulatory standards apply for the customer's benefit, market integrity, and stability. Ultimately, the regulation intends to safeguard and protect the customer, and organisational and reporting requirements will herald the need for self-regulation.

For the UK's FinTech sector, this is a welcome move and will give the UK a fighting chance to uphold its approach to financial services and future technology innovation by ensuring effective competition continues. It also marks a more serious consideration of the crypto industry, with more announcements coming in the forthcoming months.

That said, the proposed regulation comes with a disadvantage to financial promotions. Firms designated as regulated stablecoin service providers will not be able to act as Section 21 approvers of financial promotions. These businesses will not be able to promote investment opportunities to potential investors who aren't certified as high net worth individuals or sophisticated investors.

What does the future hold?

This announcement is a pivotal and exciting moment for the future of crypto-asset payments in the UK, and regulation is a crucial enabling factor for the industry.

The UK will be able to attract and retain top FinTech innovation and support its plan of becoming a global hub for digital payments by attracting talent from across the globe. The government will be paid dividends in driving investment in UK FinTech and adding to the value of the exchequer.

About Joaquin Ayuso de Paúl

Joaquín Ayuso de Paúl serves as Head of Nium Crypto. Joaquin’s work focuses on expanding the business into the crypto, investment and lending sectors. He is a firm believer in leveraging the core of Nium’s current offerings to provide new avenues for users. His passions also drive him to explore the NFT, web3 and blockchain spaces. 

Prior to Nium, Joaquin co-founded and served as CTO of Tuenti, a private social network often referred to as the “Spanish Facebook”. He also founded Kuapay, which developed a secure, mobile, payment method platform in Chile and Colombia. He also recently co-founded Rayo, a digital bank for immigrants in the US, which launched in 2021.

The fast transformation has significantly increased productivity, employee morale, customer satisfaction, and business operations. Today companies can link multiple departments and activities through a single portal. It's easy to operate primary tasks without significant knowledge or professionalism. Companies either hire or outsource IT practitioners in traditional business operations to create business applications.

Businesses that opt to buy off-shelf systems/applications must either adapt to the new system or change their operations. Hiring professionals is quite expensive, leading to many business failures. Today No-code software has introduced new advanced business processes that are easy to adapt and utilise.

No-code system

What is no-code? Why is it important? No-code system is a digital solution for many businesses globally. In layman's thinking, it's an adaptive system that turns basic users and employees into citizen developers. Anyone with basic IT knowledge can utilise no-code software to create significant business apps.

No-code is an advanced technology that helps businesses create applications without hand-coding or traditional coding. The system offers visual graphic features that require a drag and drop process to build an app. The process requires a few days or hours to develop a complete application. It's possible to utilise a single app for multiple tasks or departments.

No-code systems are easy to operate, unlike hand-coding, which needs IT, professionals, or programmers. The coding process is practical and uses visuals for simplicity. Companies should implement no-code platforms to enhance their business operations. This builds the employee's morale as they are involved in the creation process.

No-code systems are pretty involved as they offer the chance to customers to view their needs. Organisations willing to invest in no-code software should get feedback from customers before purchasing a no-code platform. Note each platform is developed with unique features to suit every business needs.

Essential features on no-code platforms

1. Drag and drop interface

The drag and drop feature is the core pillar that allows basic users to develop apps quickly. The feature requires citizen developers to drag and drop application features to create a business app. No hand coding or coding knowledge is necessary to operate the feature.

2. Data connections

No-code systems are designed with different features; some offer database and server systems while others don't. No-code system without the database system allows users to incorporate their preferred database. The no-code software helps in data management and will enable organisations to process their data efficiently.

3. Visual modelling

No-code software has visual graphics features preinstalled to help citizen developers build apps fast. Since the platform has all tools defined with clear images, no creation efforts are required.

4. Easy integration

Modern businesses can quickly implement no-code software on their systems. The software is designed to work with different business software without shifting the normal functionalities. Organisations need to review the type of no-code platform before purchasing or integrating with the existing system. Note each system is unique and provides different features according to business needs.

Benefits of no-code development platforms

1. It saves time and increases agility

Through the pre-installed features, no-code platforms are easy to operate. Citizen developers can create business apps within short durations. No-code systems are easily integrated with another system to offer automation. This saves time through automated tools and increases business agility. Employees get ample time to venture into new projects, which increases productivity.

2. Save resources/cost-effective

Seeking IT developers or coding professionals is quite challenging and costly, especially for startup businesses. Companies outsourced programmers to help in coding and building business applications in the past. A single application took months to develop; it was time-consuming and expensive. Today, businesses can utilise their in-house employees to build an application through no-code platforms. There is no extra cost in building or hiring experts for the development process.

3. Accommodative/collaborative

Both customers and companies have a fair share of no-code development platforms. The platform is inclusive, giving customers the chance to provide feedback. The organisation uses the information to develop an application that aligns with the needs. Basic IT users have the privilege to use advanced technology to build apps.

No-code accommodates all users besides their education level and skills. The visual modelling features are practical, giving citizen developers a chance to establish business apps. The software doesn't eliminate the need for IT professionals. However, it enhances the skills that they implement in the business. IT programmers can help with security details, creating a unique and safe application in the organisation.

4. Increase productivity

No-code increases agility, which in turn increases productivity. The automation process in most business tools helps businesses conduct more services without strain. The software helps increase revenue by allowing employees to utilise technology for their operations. This increases their morale, giving them a reason to produce more.

5. Easy to modify

Unlike traditional coding, which required users to build a new app for different tasks. The No-code system is easily modified to suit the current need. Organisations can use a single app for various services or departments. The developers can change the app anytime without altering business systems. The ease of modification reduces the need to build multiple apps for every task. The no-code platform modification process will require the drag and drop features to create the preferred application quickly.

Conclusion

No-code is the propelling power for many businesses today. The software offers quality features to suit every user regardless of IT knowledge. It's cost-effective, simple, and valuable for companies. No-code simplicity is accompanied by automation, thus improving business operations. Organisations need to invest in good no-code services to attain the best business results. It’s advisable to check on no-code features that align with every business aspect. 

In June 1919, two daring British aviators guided a modified Vickers WW1 bomber across the Atlantic to complete the first non-stop transatlantic flight in just under 72 hours. Fifty years later, in March 1969, André Turcat piloted the supersonic Concorde’s maiden Toulouse flight which lasted only 27 minutes— barely enough time for dear André to finish his Orangina.

While perhaps romanticising these two feats, they underscore a notable dynamic.

Increased levels of innovation during difficult times create an amplified economic impact and opportunity in the ensuing years. This impact may not be entirely appreciated, most especially as it relates to today.

Innovating the Tech and the Business Model too

Furthermore, an unprecedented level of tech innovation, coupled with a maniacal focus on business model innovation/rationalisation, should deliver an amplified economic, earnings and productivity impact for years to come.

A recent McKinsey report stated three out of four executives believe changes brought about from the pandemic will be a significant growth opportunity. And all executives agreed, Dolly Parton’s “Jingle Bells” rendition was “one of the greatest holiday songs ever.” Thanks for that, McKinsey!

While more efficient business models are lovely, for publicly-traded equities, some of this is already baked in, as equity valuations are pricier than a fully-refundable Concorde ticket from CDG to Rio.

Although this double scoop of innovation provides ample opportunity broadly, there is also an avalanche of irrationality and noise, especially within the uncharted crypto and NFT worlds.

To quote universally-cherished Laura Dern in genius David Lynch’s Wild at Heart: “This whole world is wild at heart and weird on top.”

So, we try to retain a soberish Warren Buffet/Cathie Woods style view on fundamentals, tangibles and execution.

Innovation to Mitigate the Flurry of 2022 Risks

As we look to deploy capital in 2022, we think this innovation-led and justified business model framework provides a grounded and reassuring logic for navigating the uncertain days ahead.

With a Royal Flush of risk (political + market + COVID + inflationary + interest rate), we are biased to deploying capital to private companies over public equities, early-stage businesses over mature, and innovators over brands. Our favourite sectors remain healthcare and technology with an affinity for companies that include unique and agile models, strong and bold operators, and underlying proprietary tech with clearly-defined adoption paths.

Last year, after investing in and later assuming the CFO role at Los Angeles-based startup Binj, a new platform that solves the “what to watch next problem”, these themes helped frame the way we operated and communicated. In telling our story and in preparing to launch the platform, we beefed up messaging around tangible strengths—a novel TV and movie discovery tool powered by a proprietary AI engine and new emotional-driven rating language—and how we would execute on thoughtfully building a community to navigate streaming content overload.

Going sector by sector, within the below, we’ve outlined our thoughts on some disjointed topics du jour and investment areas we like.

Economic Growth and Labour Reshuffle: We expect overall economic growth will be stronger than predicted with innovation’s fruit and the most dramatic reshuffling of the job market seen in a century fuelling new activity. We’re not putting a lot of weight on 2021’s final GDP % growth number though, given 2020 was oh so weak and there is a lot of noise in the numbers. Nonetheless, 2022 growth should continue at a similar cadence.

Interest Rates & Inflation: With almost every single holiday party and central bank meeting behind us, it is clear that inflation is even more serious than we previously thought. The Fed policy pivot and The Bank of England’s more dramatic and unexpected rate increase from 0.1% to 0.25% (the first increase in over three years) underscored this.

Global Equity Markets: With valuation multiples rich, equity markets will remain choppy and range-bound, especially with higher interest rates.

Deep Tech: Some of the greatest technologies have always existed courtesy of Mother Nature and some entrepreneurs are well-positioned to harness, mimic and unleash that which has always been present. Companies such as Silicon Valley-based Koniku blend the right ingredients of healthcare, technology, and biosecurity. A Shazaam for smells, the company’s central tech elegantly takes what already works amazingly well in the natural world (a dog’s sensory apparatus) and packages it into a small device that can seamlessly detect explosives, narcotics, and COVD in real-time.

Our favourite sectors remain healthcare and technology with an affinity for companies that include unique and agile models, strong and bold operators, and underlying proprietary tech with clearly-defined adoption paths.

Africa: An emerging middle class, swift mobile adoption, and green pastures for innovation and leapfrogging, yield tailwinds. We like founders who courageously collaborate with various stakeholders (employees, partners, regulators), genuinely feel the pulse of the customer and utilise tech to magnify opportunities on the ground. In particular, Nigeria-based Lifestores Healthcare (a rapidly expanding network of tech-enabled pharmacies), and Kenya-based Koa (an innovative, community FinTech platform), are well-positioned.

Preventative Health Services: The pandemic has enabled consumers to access healthcare more broadly than ever before and raised awareness on preventive care. We think companies that are empowering users with enhanced access and new types of information such as Phosphorus (a preventive genomics testing company that enables customers to optimally map their health journey based on their DNA), and Freenome (an early-stage cancer detection platform), are ahead of the curve.

FinTech: Growth will remain hot with fewer brick and mortar banks of yesteryear, increased consumer comfort around mobile banking, and new one-stop platforms that go beyond full-service legacy bank offerings. One such innovator is Pallo (an all-in-one platform designed specifically for freelancers, which helps users manage all personal and business finances, from money management to taxes).

2022 Should Be Better

Whilst history is obviously not always the best predictor of future success (Google Glass, Apple Maps, Speed II: Cruise Control) this innovation factor is objectively real and potentially more potent than in 1919 or 1969.

While in this piece, we have pointedly omitted some dramatical forces at play that are above our predictive pay grade (China’s muscle and Russia’s flex, crypto and NFT chaos, the painful $USD demise, omicron, Kristin Stewart’s portrayal of Diana in Spencer), on the simplest level we think 2022 should be markedly better than 2021 for most things but most certainly not for air travel.

About the Author

Steven Barrow Barlow serves as the CFO of BINJ and co-runs Andon Okapi Holdings, an investment firm providing financial, operational and strategic support to founders with big ideas & unique tech. After a decade as an equity analyst on Wall Street covering the consumer and healthcare sectors, he co-founded Kallpod in 2014, a tech solutions provider for the hospitality & healthcare industries.

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No Investment Advice

The content in this article is for informational purposes only and should not be construed as financial advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, or offer by Steven Barrow Barlow, BINJ, Finance Monthly or any third-party service provider to buy or sell any securities or other financial instruments.

IBM is an established and trusted partner across the financial sector, what does your position entail?

I am responsible for leading the banking consulting practice across IBM’s Global Business Services, concentrating on the bank’s digital transformation, core banking, and payments.

I am also the President of the IBM Industry Academy, an energetic and diverse community of IBM’s industry experts, thought leaders and consultants aiming to shape new solutions that will support our customers as they navigate to win in a rapidly changing future industry landscape. The Academy offers IBMers the opportunity to work cooperatively and collaborate with industry experts from every part of IBM.

Since my career began almost three decades ago, I have been fortunate enough to work across six different continents in various consulting and leadership roles in the financial services sector. This, combined with my current role and involvement with the IBM Industry Academy, provides me with a unique perspective and overview of the trends affecting other sectors, which helps me think outside the box for our financial services clients.

Are you able to tell us more about your recent appointment to BIAN’s Executive Board and BIAN’s role in the industry?

BIAN is an organisation of institutions and professionals from the financial and technology industries, standing for the Banking Industry Architecture Network. It is a collaborative, not-for-profit eco-system of leading banks, technology providers, consultants, and academics from all over the globe, who are committed to lowering the cost of banking and increasing the speed of innovation adoption in the industry. Members combine their industry expertise to define a revolutionary banking technology framework that standardises and simplifies banking architecture to overcome limitations preventing growth and encourages ease of management in their existing environments.

The invitation to become a member of the BIAN board was an opportunity I could not refuse. I am truly honoured to be part of BIAN’s executive board to offer counsel and support their work in helping financial institutions navigate this period of immense opportunity and disruption. Now, more so than ever before, BIAN’s open framework, services-oriented architecture, and standards model are essential to the financial services industry.

The banks that succeed will be the ones who have a technology and business strategy to support the ‘bank of the future’ in which much of the middle and back office get completely automated and more of the focus, investment and innovation gets applied to customers and customer value-adding functions.

Having worked in the financial services sector for a number of years, what makes you so passionate about the industry?

There are numerous reasons why I am so excited about present and future opportunities across the sector. However, one reason that stands out to me is the impact it has on people's everyday lives.

I am a strong advocate for financial inclusion and make it part of my practice to highlight its importance. Financial well-being and access to financial services should be available to all, no matter where you are in the world. So, I am continuously committed to supporting banks around the globe to expand the availability of banking services and reduce the cost point in doing so.

Financial inclusion is obviously incredibly important. But what measures can global banks take to increase the availability of banking services and reduce the cost point in doing so?

There is still a lot to be done to achieve inclusive banking globally. Although incumbents, FinTechs and TechFins have made massive investments in technology and innovation, there is still scope for more. Globally, billions of people still lack access to basic financial services. Critical areas such as payments - particularly cross border payments - continue to be expensive and access to credit remains a challenge for so many.

The combination of regulatory efforts, banks creating technology and business strategy that supports the bank of the future, and the prioritisation of innovation powered by hybrid cloud and artificial intelligence will inspire the transformation of the entire banking and financial services infrastructure.

Although a great deal more needs to be achieved, it is very encouraging that the combination of technological innovation – coupled with the emergence of new business models – is democratising finance like never before.

What can banks do to prepare for the future?

COVID-19 and changing regulatory environments has driven an evolving landscape which banks and FinTechs are navigating, while the financial services industry is being shaped by new consumer trends – from the rise of a cashless society to the pandemic-driven shift towards online banking and mobile payments.

There will be a continued focus on technological development to accommodate these changes. The banks that succeed will be the ones who have a technology and business strategy to support the ‘bank of the future’ in which much of the middle and back office get completely automated and more of the focus, investment and innovation gets applied to customers and customer value-adding functions.  This requires rapid digitisation and the adoption of exponential technologies to innovate, powered by the hybrid cloud and artificial intelligence. BIAN has an essential role in helping banks do just this.

With the move towards digital banking, including the increasing use of mobile contactless payments by customers, what will this mean for the bank of the future?

Digitisation is on the one hand driving innovation, new business models and efficiency while at the same time enabling extreme competition from both traditional and non-traditional competitors. In tomorrow’s banking eco-system model, more and more of the value is accruing from customer-facing functions supported by platform-based business models. By extension, this has meant competition from both FinTech and importantly TechFins (large technology companies that are moving into the less regulated aspects of financial services such as payments, electronic wallets, BNPL – buy now pay later models and more).

Banks in the future will increasingly not only automate extensively, but they will also likely extend their business models to create ‘beyond banking platforms’ to help their customers in a much broader context beyond the traditional banking value chain. The future of such models is being written in Asia by banks such as DBS in Singapore, SBI in India and many more as they change their business models to blunt the onslaught of the ‘super-apps’ such as Alibaba, Tencent, Grab, Gojek etc in that part of the world.

How can the industry find its footing after such a change?

Banks have several natural advantages that come from incumbency, customer loyalty and material regulatory barriers preventing non-traditional competitors from rapidly breaching their businesses. Regardless mastering the future will require banks to ask themselves three questions:

1. Is our strategy ambitious enough?
2. Are we executing fast enough? and
3. Do we have the talent and capabilities to win?

Answering these questions honestly and then putting in place programs to execute relentlessly is the only way for the industry to continue to thrive and take advantage of the huge opportunities that are presenting themselves in the coming decade.

When lockdown was announced more than 12 months ago – an entirely new concept that brought with it a multitude of unknowns and an unpredictable, unstable future – businesses barely stopped for breath before they adapted and pivoted to the new landscape. Small businesses, in particular, responded to the global crisis with a clear demonstration of their versatility, creativity and tenacity.

Restaurants offered take away for the first time. Retailers launched Click and Collect services. GPs switched to telephone and video appointments. Gin distilleries halted production and adjusted their production line to make antibacterial hand gel. Textile factories began producing scrubs and face coverings to protect front-line workers. Tech firms invested in building medical ventilators to help save lives. After a very long 12 months, this level of quick thinking and innovation, as inspiring as it was, already seems a rather distant memory.

However, while agile businesses made big changes to support customers and the wider community, some parts of the financial services sector found it difficult to keep up. Regulation and legacy infrastructure, along with good old-fashioned risk mitigation, meant some banks, in particular, struggled to consistently respond to changing customer needs and expectations.

However, they did not stand back and accept defeat. In fact, in crisis mode, banks rapidly changed their digital trajectory. According to research we commissioned last November, the pandemic caused more than half (58%) of banks to change their IT infrastructure plans. And to get new solutions to their customers quickly, more banks than ever saw the valuable opportunity of third-party collaboration.

Tackling the banking challenges together

Working closely together with FinTechs and financial utilities, banks have been able to deliver new digital accessible solutions to meet the needs of their retail and corporate customers. Now, looking ahead to what 2021 and beyond holds, the new challenge is to ensure the innovation and collaboration that became necessities in 2020 become the norm, rather than another distant memory or passing phase.

In November 2020, Banking Circle spoke to 300 C-Suite decision-makers at Banks across the UK, DACH (Germany, Austria and Switzerland) and Benelux (Belgium, The Netherlands and Luxembourg) to discover the specific challenges they face - internal, external and COVID-induced - in future-proofing their organisations and enhancing customer propositions. Published in a white paper ‘Better business banking: Collaborating for success’, the research reveals that existing IT infrastructure is the biggest internal challenge holding banks back from achieving their business objectives.

Unencumbered by such legacy systems, FinTechs have been able to serve consumer and corporate customers efficiently and at low cost in many areas, often competing with traditional banks. But banks have been quietly preparing to fight back - they have been changing their business practices, culture and technology to remain competitive and provide their customers with the solutions they need for today and tomorrow.

Barriers to better banking

Banks have big ambitions; as previous Banking Circle research revealed in 2020[1], most already had digitalisation plans in place, pre-COVID. However, having been built in very different times, with vastly different technology available, not to mention almost unrecognisable customer requirements, banks now face a multitude of challenges in futureproofing their offering.

Here are a few take-outs from our November 2020 research:

• 42% said existing IT infrastructure is one of their three biggest internal challenges.
• Lack of integration with customer-facing departments was a key issue for 40% of banks.
• High customer expectations are the most common externally focused difficulty faced by banks, with 39% saying this was one of their top three external challenges.
• Working from home operations, an area where COVID-19 has changed priorities for individuals, businesses and banks across Europe, came in a close second, with 38.7% of banks placing it in their top three.
• Regulation is challenging 34% of banks, but less than a third (30.7%) say impending recession is a top challenge.

2021 has brought with it many new regulatory challenges, particularly regarding cross border trade. The UK’s exit from the European Union has resulted in significant change, much of which was still to be determined at the time we surveyed European banks. On top of this uncertainty, CBPR2 electronic messaging requirements for card issuers have now come into effect, adding complexity and requiring compliance investment.

These and other operational challenges are sure to impact profit margins, affecting small businesses’ ability and willingness to pay traditional high fees for cross border payments. And with the global digital economy now vital to many enterprises’ survival, this could drive a push towards more affordable solutions from alternative providers. It is unsurprising, therefore, that 70% of the banks we surveyed consider cross border payment provision to be a core banking service. This rose to 90% among UK banks, perhaps reflecting the anticipated consequences of the country’s exit from the EU.

As the pandemic continues to call the shots around the world, recovery feels painfully slow and uncertainty persists. Now more than ever, therefore, banks need to find cost-effective ways to support business customers whatever the future brings.

Clearing the way for cross border trade

Just over half of the banks in our study confirmed that they use direct clearing through central banks to process cross border payments. A similar number use the correspondent banking network, and around one in three use the SWIFT network.

As global trade levels begin to pick back up to pre-COVID levels, banks must be ready to support businesses in their bounce-back. Access to affordable, friction-free cross border payments will be essential to that recovery, and banks able to provide this can empower even the smallest merchant to serve customers in any geography. Not only will this help small businesses and start-ups to thrive post-COVID; it will also bolster international economies at a time when they are in great need.

Working with third-party service providers is now an important part of banks’ business planning. Half of those surveyed already have partnerships or plan to work with an external provider within the next month. An additional third have partnerships on the agenda for the next 12 months.

As the pandemic continues to call the shots around the world, recovery feels painfully slow and uncertainty persists. Now more than ever, therefore, banks need to find cost-effective ways to support business customers whatever the future brings. And the support needs to be convenient, accessible and, above all, valuable. Solutions need to be investment-light yet deliver strong innovation, flexible enough to meet rapidly shifting expectations and needs.

2020 brought an increasing trend towards collaboration. Now to meet these evolving business needs, collaboration must be embraced to bring benefits for all sections of the financial services sector. Through partnerships with infrastructure providers banks gain the agility and innovation of a FinTech, while FinTechs gain compliance and security processes, enabling them to focus on building strong customer relationships.

The 2020 legacy

In the past 12 months, banks and payments businesses alike found the fastest way to get essential new solutions to their customers was to work with an expert who had already developed the solution from end to end. And to see how the banking industry stepped up and responded to the crisis was truly inspirational. Priorities and budgets were shifted overnight, digitalisation plans were dramatically fast-tracked to deliver the solutions customers needed, support staff set up call centres at home. It was far from easy, but the pandemic helped banks find the motivation they needed to future-proof their processes and solutions through collaboration.

Now is the time to reap the benefits. In the face of unprecedented challenge, banks stepped up and set the precedent for future-proofing banking. And that must be the legacy of 2020: better business banking. 

To download the Banking Circle white paper, go to https://www.bankingcircle.com/whitepapers/better-business-banking-collaborating-for-success. 

[1] Source: Banking Circle white paper: Bank to the Future - https://www.bankingcircle.com/whitepapers/bank-to-the-future

Walter Stresemann, Founder and Managing Director of Magnolia Private Office, a trust and fiduciary company in Geneva, analyses the new challenges and opportunities the private banking sector is facing.

What is a private bank? We usually use the term for any corporate body specialising in wealth management for High-Net-Worth individuals. The original definition, however, meant unincorporated banks – those owned by an individual or partners with unlimited liability, and therefore unlimited personal responsibility. Not banks, but bankers.

While only one of these ‘banks’ still exists – Bordier & Cie – this old definition still gets to the heart of what private banking should be about today.

Gone are the days where a client needs help accessing basic investments – anyone can now stash their money away to be run by a simple trading algorithm. Instead, the private banker must adopt a ‘family office’ approach, providing highly tailored advice to address myriad client needs, and matching the client with the most appropriate services from their networks, such as product experts, financial planners, or tax specialists.

Digital Transformation

Digitisation is surging forward. Some 85% of HNW and UHNW individuals use at least three mobile devices. They expect to be able to scan their investments and banking services at a glance, seamlessly and in real-time, on their tablet, smartphone, or computer. More than half of HNW clients over the age of 40 say they would leave their private bank if an integrated, seamless channel is not provided, and the next generation will be no less demanding.

Serving this client base effectively requires open architecture enabling collaboration between providers of diverse products and investments from equities to real estate to works of art, sourced from the banker’s or client’s network, all available within one secure digital experience.

Wealth managers are acutely aware of the apparent drawbacks of ‘going digital’: in a recent survey, more than half were concerned about being able to present data intuitively and provide clients with genuinely useful oversight. However, COVID-19 has required most clients to embrace, or at least experiment with, digital channels. Clients who might have previously dealt with their banker in person, on the phone or via email now, are now embracing more of the bank’s digital offering, thanks in large part to the requirements of the extended COVID-19 lockdowns. This means they have heightened expectations of digital-enabled private banking even after the pandemic is over.

All that said, the wealth manager who maintains a genuinely holistic view of his clients’ interests will continue to thrive in a digitally-enabled future. Personal contact, and the ‘trust factor’, are not going away – they may indeed become more important. Right now, for example, clients are confronting a host of very personal uncertainties created by COVID-19, ranging from place of domicile (where is genuinely ‘safe’?) to inheritance planning.

Clients increasingly also want access to private markets, and to dip into investments otherwise touched by private equity. The pandemic has given this a renewed salience, with a drive to hedge unstable equities and low-yield debt. These are all investment and ‘real life’ decisions best guided by the steady hand of a trusted adviser.

Expertise is still highly valued, but it needs to be well delivered.

Genuinely differentiated ‘human’ expertise was already in demand long before COVID-19. Clients themselves are increasingly savvy. Usually, they grew up with better access to information, and wider consumer choices, than their parents. They demand transparency, wanting to know exactly what they are getting for their money. They negotiate fees, with a keen eye on what competitors have to offer. Old loyalties have given way to a demand for ‘client experience’, with 45% of millennials saying they would regularly switch to alternatives in search of the best solution. So expertise is still highly valued, but it needs to be well delivered.

Structural Changes

Compliance costs represent another pressure on the sector. They currently consume 4% or more of revenues, with some warning that this toll could rise to as much as 10% in the coming years for firms who cannot enact the right efficiency savings.

Global anti-money laundering rules, spearheaded by the intergovernmental Financial Action Task Force, have been criticised as the world’s least effective policy experiment, with the amounts of laundered money seized utterly dwarfed by the costs passed on to banks and other businesses. Common Reporting Standard regulations, while yielding mixed results in the global battle against tax evasion, have burdened private banks with analysing the residence status of their clients. MiFID II has created costs as well.

All of these pressures serve to drive sector consolidation – the word on everyone’s lips for the past decade. Nowhere is this clearer than in Switzerland, with the number of independent banks primarily involved in wealth management reducing by 31% between 2010 and 2017.

The costs of servicing an increasingly global client base are also tangible. Once upon a time, Swiss bankers could expect many of their clients to come to them from abroad. Nowadays, more and more HNWIs are based in the Asia-Pacific region, forcing Europe’s more intrepid wealth management businesses to make inorganic acquisitions overseas.

In search of revenue growth, some private banks are working their way down the value scale, not to UHNWIs or HNWIs, but ‘mass affluent’ individuals with one to five million dollars in assets. What they can really offer to such clients is not always clear – is the move just a number-boosting ploy, to get more AUM on their books? If so, private banks are probably heaping more pressure on their own profit margins, since ‘mass affluent’ clients seem to be less loyal than their wealthier counterparts, adding to retention costs.

Private banks can only hold off from confronting these challenges for so long. Differentiation is surely the way forward: a ‘family office’ approach, in which wealth managers exit less profitable parts of the value chain such as custody, and focus instead on high-quality advice, good networks, and enabling the digital access and remote service that clients now expect. The private bankers able both to master the technology ecosystem and to maintain their ‘human face’ will be the ones who thrive in the years to come.

2020 saw a flurry of announcements from companies across the world, pledging ambitious, and often aggressive, carbon targets. From Microsoft’s carbon negative goal to BlackRock’s pledge to stop investing in companies with high sustainability-related risks, organisations are becoming increasingly accountable for their actions when it comes to the environment and climate change.

A recent study into the sustainability attitudes and actions of senior executives found that 75% of executives believe sustainability will provide a competitive advantage in the future, yet only 30% believe they are successful today. Of course, setting and publicising goals is only the first step. To become a true leader in sustainability transformation, it must be embedded in every part of the business, especially the finance department.

Only one in 25 (4%) of Chief Financial Officers currently have responsibility for developing and monitoring corporate sustainability goals, according to ENGIE Impact’s study. Instead, executives pointed to Chief Sustainability Officers (26%) and Chief Operation Officers (25%) as bearers of that responsibility. This finding points to a missed opportunity to ensure that the strategy, funding, and execution of sustainability projects are optimised to meet an organisation’s goals. Given that capital and investment is critical to the success of corporate sustainability initiatives, as underscored by finance authorities such as the Bank of England, the question for CFOs and their teams is “How can we position finance as a lever to make sustainability happen?”.

Accelerating decarbonisation: integrating sustainable finance

As demand for more sustainable action from organisations rises, so does the need for capital. With their oversight of an organisation’s budgets and investments, CFOs and finance departments should be firmly in the driving seat of the sustainability transformation journey. Finance teams need to think beyond their traditional investment approaches if they are to succeed and help the organisation meet its carbon goals.

For example, corporate capital expense budgets often have strict payback periods (typically two years or less). As a result, companies defer sustainability projects, such as carbon mitigation strategies that don’t offer direct operational benefits or quick paybacks, which only serves to increase the long-term costs of meeting carbon reduction goals. Subject to these constraints, sustainability and operation teams focus instead on quick payback projects that don’t necessarily have a significant sustainability impact. With many companies pledging to meet carbon reduction goals by 2030 or sooner, they can’t afford to delay more transformational projects.

The benefits of portfolio financing 

In our survey, only 6% of all C-suite respondents revealed their companies had significantly adopted third-party financing to meet ambitious carbon goals, presenting a potential sticking point for finance teams when it comes to addressing sustainability.

In a general business context, third-party relationships are often used to boost capacity for projects and provide additional expertise. In a finance and sustainability context, third-party financing also allows companies to smooth out the costs of sustainability projects. Unlike the payback constraints of internal financing, external financing benefits from longer tenors, enabling finance teams to accommodate a range of projects, as those with quicker payback periods balance those with longer paybacks. In this way, they can optimise for the portfolio of projects that deliver deeper and more cost-effective carbon levels than if they were financed separately. This approach is a popular one - according to our survey, 64% of companies that are successful in sustainability transformation used the portfolio approach to finance projects at scale.

Still, third-party financing is not a solution that is likely to scale with a company’s increasing sustainability ambitions. Although it allows for companies to take on more projects than with internal financing, executing a large portfolio of projects can prove challenging (both technically and from a financial structuring perspective), and companies may be wary of increasing their debt load for projects that they and their investors do not deem core to their business.

The Energy-as-a-Service approach

For finance teams to truly maximise sustainability outcomes within their organisation, one of the most robust financing models is Energy-as-a-Service (EaaS). Unlike internal and third-party financing, the EaaS model allows a company to shift responsibility for its energy assets to a third-party. Responsibility for the design, implementation, financing, maintenance, and performance of the target portfolio of projects is externalised and transferred to EaaS providers, with the goal of ensuring that its customers’ expected energy targets are achieved.

EaaS contracts tend to be longer than third-party financing, especially when more capital-intensive projects, like on-site renewable energy generation, are involved. But this longer contract term also means that, if scoped correctly, an organisation can generate enough savings (from lower energy costs and more efficiencies) to cover the contractual EaaS payments.

Another advantage for companies is that there is also less risk involved with EaaS approaches―both in terms of reputation and pressure to meet goals―since the performance risk also shifts to the EaaS providers. Rather than financing the investment in particular energy assets, a company’s payments are tied to particular energy outcomes being delivered (e.g., units of renewable energy generated, or certain levels of efficiency attained).

The opportunity to step up 

Achieving the important carbon goals and sustainability targets that companies have established will require tightly coordinated and well-resourced internal efforts. CFOs and other finance leaders are key players in this undertaking; they have an opportunity to partner with sustainability and operational teams to drive sustainability strategies and projects forward by applying the financing approaches that best match their organisation’s ambitions. Indeed, internal capex financing may not be a viable, long-term investment option for many ambitious sustainability projects due to the risk of not being able to meet carbon goals.

Instead, companies and finance departments must invest with a portfolio lens, balancing the financial benefit of short-term payback projects with the deep carbon reductions of more intensive projects. As companies adopt more significant sustainability targets, EaaS contracts will become an increasingly attractive way to achieve their goals while managing risk and externalising financing. By rethinking finance approaches to be more innovative and in line with future demands, finance departments can ensure that their company stays on track to achieve its sustainability goals.

But it is the speed at which the technological advancements have reached that has forced traditionally slow-moving financial institutions to heavily invest to remain relevant to their consumers and remain competitive in the marketplace.

Personal

Banking is one of the oldest businesses in the world, going back centuries ago, in fact, the oldest bank in operation today is the Monte dei Paschi di Siena, founded in 1472. The first instance of a non-cash transaction came in the 20^th century, when charga-plates were first invented. Considered a predecessor to the credit card, department stores brought these out to select customers and each time a purchase was made, the plates would be pressed and inked onto a sales slip.

Once the sales cycle was over, customers were expected to pay what they were owed to the store, however due to their singular location use, it made them rather limiting, thus paving way for the credit card, where customers that had access to one could apply the same transactional process to multiple stores and stations, all in one place.

Contactless

Leisurely spending has changed that much that we can now pay for items and services from the watches we wear on our wrists, but it wasn’t always this easy. Just over a few decades ago, individuals were expected to physically travel to their nearest bank to pay their bills, and had no choice but to carry around loose change and cash on their person, a practice that is a dying art in today’s society, kept afloat by the reducing population born before technology.

Although the first instances of contactless cards came about in the mid-90’s, the very first contactless cards associated with banking were first brought into circulation by Barclaycard in 2008, with now more than £40 million being issued, despite there being an initial skepticism towards the unfamiliar use of this type of payment method.

Business

Due to the changes in the financial industry leaning heavily towards a more virtual experience, traditional brick and mortar banks where the older generation still go to, to sort out their finances, are now in rapid decline. Banks are closing at a rate of 60 per month nationwide, with some villages, such as Llandysul closing all four of its banks along with a post office leaving it a ghost town.

The elderly residents of the small town were then forced into a 30-mile round trip in order to access her nearest banking services. With technology not for everyone, those that weren’t taught technology at a younger age or at all are feeling the effects most, almost feeling shut out, despite many banks offering day-to-day banking services through more than 11,000 post office branches, offering yet a lifeline for those struggling with the new business model of financial firms.

Future innovations

As the amount of digital natives increases year on year, the demand for a contemporary banking service continues to encourage the banking industries to stay on their toes as far as the newest innovations go.

Pierre Vannineuse, CEO and Founder of Alternative Investment firm Alpha Blue Ocean, gives his comments about the future of banking services, saying: “Artificial intelligence is continuing to brew in the background and will no doubt feature prominently in the years to come. With many automated chatbots and virtual assistants already taking most of the customer service roles, we are bound to see a more prominent role of AI in how transactions are processed from all levels.”

Technology may have taken its time to get to where it is now, but the way in which it adapts and updates in the modern era has allowed it to quicken its own pace so that new processes spring up thick and fast. Technology has given us a sense of instant gratification, either in business or in leisure, we want things done now not in day or a week down the line.

Sources:

https://www.sysco-software.com/7-emerging-trends-that-are-changing-finance-1-evolving-cfo-role/

https://www.vox.com/ad/16554798/banking-technology-credit-debit-cards

https://transferwise.com/gb/blog/5-ways-technology-has-changed-banking

https://www.forbes.com/sites/forbesfinancecouncil/2016/08/30/five-major-changes-that-will-impact-the-finance-industry-in-the-next-two-years/#61cbe952ae3e

These days, financial stability really sounds like an elusive subject. We indeed have bills to pay, and a life to lead. But, if we don't take a seat, analyze, and create a financial bucket list, then we risk living within the shackles of our obligations. Here are eight financial tips that can help anyone secure their financial future and enjoy financial stability.

Create a passive income

Financial stability is a result of hard and creative work. And if you want to enjoy it, then you need to get creative too. That said, we cannot always control our expenses and bills, but what we can actually control is how much income we realize. Generating more revenue to offset any financial obligations one may have been an excellent way to go. A passive income is any income you generate from a job or task you are not actively working at. There are many ways to get this done, and the most popular ones are through websites, rental properties, small online businesses, freelancing, online trading, and affiliate programs.

Live without debt

Debt is one of the many obligations capable of ruining anyone's shot at financial stability. If you are still living in debt, it is almost impossible for you to be stable financially, let alone secure your financial future. Do you have credit card debt, personal loans you are paying off, or mortgage to attend to? All of these are going to hinder you from leading a financial future and becoming stable financially. Hence, you have to be rid of any debt you may have before you look to become stable financially because, without that, financial stability will continue to elude you. There are different ways to tackle one's debt, depending on the terms and duration of the debt. From the traditional debt consolidation method to the highly effective IVA scheme, debt of any kind can be addressed and resolved.

Create a 3-month emergency fund

Whoa, that's a lot of money! Once you are done breaking the shackles of debt around you, the next thing is to start preparing for the future. And a 3-month emergency fund would be a great place to start. Emergency funds are there for the rainy days, which is why you need to have one today if you really want to enjoy financial stability. Think about it, instead of going to get a loan to deal with an unforeseen event; you can dip into your emergency funds.

Open a money market account

Preparing for the future doesn't necessarily mean preparing for the next few decades ahead; instead, your future could be tomorrow. And if you don't have a robust financial platform to rely on, you may find it absolutely difficult to attend to your existing financial obligations and emergencies. In that light, having a money market account is another vital requirement for anyone interested in experiencing financial stability. A money market account is quite similar to a standard savings account, albeit with higher returns and better access to your money. Checking with your local bank is a great way to research the ideal account for you.

Create a vacation account

The best time to visit your dream country is while you are on holiday. But how many people can fulfill this dream? And how many of those who eventually achieve this do so without getting into debt? Don't be one of them! Visit your local bank and create a separate account where you can stash little cash every month for your next vacation so that your next holiday wouldn't break the bank.

Improve your Credit and FICO Score

That you don't run a business today doesn't mean you may never be entrepreneur, and the fact that you have some cash in your emergency funds doesn't mean you will always be able to resolve every financial emergency that comes your way. Hence, it is always great to have a good Credit and FICO Score as you never can tell when you might need to obtain funds from external sources to either finance your big business idea or resolve your unforeseen emergency. Your FICO Score determines what sort of risk a future creditor is willing to take on you. Having a high, and above 700 FICO Score is quite feasible if you pay all your existing debt as at when due, keep credit card balances low, and pay your bills on time.

Have a retirement plan

Start saving for retirement today with a 401k or an IRA plan. You should talk to your financial advisor to determine which plan is best suited to your needs.

Authored by Uday Tank.

Uday Tank has been working with writing challenged clients for several years. His educational background in family science and journalism has given him a broad base from which to approach many topics. He especially enjoys writing content after researching and analyzing different resources whether they are books, articles or online stuff.