With the entire industry currently under pressure due to uncertainty, data must lie at the core of every decision any business makes if it wants to succeed. In fact, research from McKinsey tells us organisations that leverage customer behavioural data and insights outperform peers by 85% in sales growth and more than 25% in gross margin. Jil Maassen, lead strategy consultant at Optimizely, offers Finance Monhly her thoughts on how data experimentation can be used to drive financial services forward.

The game-changing nature of data

One of the best examples of risk and reward, based on data science, comes from the world of baseball. Back in 2002, Billy Beane, general manager of the unfancied Oakland Athletics baseball team, spawned an analytical arms race among US sports teams. Working under a limited budget, Beane used obscure stats to identify undervalued players — eventually building a team that routinely beat rivals who had outspent them many times over.

Data analytics turned the game on its head by proving that data is an essential ingredient for making consistently positive decisions. The success of the bestselling book and subsequent Oscar-winning film, Moneyball, based on Beane’s story, took data analytics mainstream. Today, financial services companies are applying a “Moneyball” approach to many different aspects of their business, especially in the field of experimentation.

Data analytics turned the game on its head by proving that data is an essential ingredient for making consistently positive decisions.

We live in testing times

Experimentation departments for the purposes of testing, also known as Innovation Labs, have been growing at a prolific rate in recent years, with financial services seeing the highest rate of growth according to a survey by Capgemini. By the end of 2018, Singapore alone had 28 financial service-related Innovation Labs. Alongside this, research from Optimizely reports that 62% of financial services companies plan to invest in both better technology and skilled workers for data analytics and experimentation.

Areas such as fund management are no strangers to data analytics. But since the fintech disruptors arrived on the financial services scene, legacy banks are now using data in combination with experimentation to evolve other elements of their business and remain competitive. Many have found that this is helping them to address common concerns, including how to improve customer experience and successfully launch products to market. So much so, that our research found that 92% of financial services organisations view experimentation as critical to transforming the digital customer experience. In addition, 90% also consider experimentation key to keeping their business competitive in the future.

Eat, sleep, test, repeat

However, experimentation takes patience. As Billy Beane said when his strategies didn’t deliver right out of the gate: “It's day one of the first week. You can't judge just yet.” He was ultimately vindicated. Like any new initiative, experiments can fail because of cultural “organ rejection.” They require taking short-term risks that don’t always work, all in service of long-term learning. It’s the job of Innovation Labs to take these risks, and often, one for the team, by being prepared to fail.

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The point is, when you're transforming something and making massive change, not everyone is going to understand right away. The best way to convince people that your theory is correct is to show them — not tell them — you're right. Experimentation initiatives in business, and especially in financial services where risks and rewards have high impact and return, allow new ideas to be proven right before they play out in front of a paying public.

Founded in facts and stats, experimentation promotes an ethos that is key in adopting new technologies and utilising data analytics to build roadmaps for the future. As the amount of data companies have access to increases, the ethos of experimentation will only become more important for predicting and changing the future for the better.

Experimentation is about measuring and learning and repeating that process until optimum results are achieved. The final word in this regard should perhaps go to Beane himself; “Hard work may not always result in success. But it will never result in regret.” His story is something that all financial services organisations can learn from.

The COVID-19 pandemic has not just had a devastating impact on health and society, it has dominated economic and business matters unlike anything we’ve seen in peacetime history, and, across the globe, schools, companies, charities and self-employed professionals are still adjusting to a brand new remote working contingency plan.

Fortunately, as a society, we are extremely well-equipped to adapt to remote working with a turnaround time of just a few days. This was proven by the sheer quantity of businesses, many of whom care for thousands of employees, who just a few weeks ago managed to transform their entire internal structure to a digital environment. Not only is this an inspiring example of human  collaboration at a time of crisis but also a true testament to the power of the technology at our disposal.

In fact, remote working has proven itself so effective for some organisations, that it has gone beyond a short term contingency plan; it’s starting to look like remote, or at least flexible working, will be incorporated in the long term for thousands of office-based workers. Clement Desportes De La Fosse, Co-founder and Chief Operating and Financial Officer at Spearvest, shares his thoughts on how the finance sector will be forever changed by the pandemic.

Although it may sound premature to think about a post COVID-19 world, a majority of industry operations are sure to change forever, and, none more so than in the financial sector. For many years, traditional banks and financial institutions have been associated with outdated infrastructure and slow legacy IT systems, which are a burden for financial professionals and consumers alike. In fact, a recent study in 2019 revealed that UK banks were hit by ‘at least one’ online banking outage every day across a nine month period.

Today, the demand for banking and financial services has never been higher: emergency loans, government payment schemes and personal finance management are required for people to survive. What’s more, visiting a branch in person is no longer an option, and therefore financial institutions are forced to invest in capable IT infrastructure and relevant automation, regulation, and finance technology to deal with influx of demand.

For many years, traditional banks and financial institutions have been associated with outdated infrastructure and slow legacy IT systems, which are a burden for financial professionals and consumers alike.

Whilst it could be argued that this much-need update was inevitable, the pandemic has certainly forced many banks’ hands in enforcing this change, and means our financial institutions will emerge from the crisis with a much more capable IT infrastructure. The following areas are where banks are, or should be investing, in the coming weeks, months and years, with insight into how exactly these cutting-edge technologies are impacting the financial services sector for the better.

Artificial Intelligence

Artificial Intelligence (AI) has been a growing trend in finance in the past decade, primarily being used to address key pressure points, reduce costs and mitigate risks. However, the demand for digital banking services as a result of COVID-19 will likely push the sector in the direction of developing and incorporating sophisticated automation and customer service AI.

We’re a few years off the mass adoption of robotics technology of this nature, but it’s safe to say the COVID-19 threat has highlighted the pressing need for more automation and better service technology.

Public Cloud

The shift toward cloud-based computing has already been significant, with most financial institution operating cloud-based Software-as-a-Service (SaaS) applications for business processes, such as HR, accounting, admin solutions and even security analytics and know-your-customer verification.

However, advancements being made in cloud technologies and increasing demand for SaaS applications for remote workers means that soon we could see core services in the financial sector, such as consumer payments, credit scoring and billing, to become stored and managed in cloud-based SaaS solutions.

RegTech

Much like the increasing demand for AI and Cloud-based SaaS applications, regulatory technology (RegTech), can do important work in ensuring financial work remains regulated and legal. The right RegTech, such as automated customer onboarding technology, can also save a firm a lot of time, freeing-up much-needed time to focus on the work that can not be completed by software or a robot.

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Big Data

Customer intelligence facilitated by big data and consumer behaviour is an incredibly important tool which can be used for extremely accurate decision making, risk-assessments and revenue and profitability forecasts, to name just a few use-case example.

Some modern financial institutions and start-ups have been using big data and analytics technology for a number of years, and those more ‘traditional’ which may have neglected this cutting-edge technology are depriving their customers of top tier financial advice and insight at a time when they are in need of it most.

Security

Cyber attacks, money laundering and hackers have always threatened the financial services to a large extent. However, with entire workforces online, operating in a remote, sometime unsecure environment, the cyber-threat facing consumers has never been larger.

Thus, cyber-security has, and should, be invested in heavily by financial institutions looking to protect their own client, employee and company sensitive information. At the same time, safe internet and banking practice should be implemented and taught to all members of the general public to ensure they do not give away sensitive information such as payment details.

Fast forward, five years from now, we will look at the pandemic as a trigger that enabled us to spend our time more efficiently, and digital technology and the cloud will be key in facilitating this positive change.

Michelle Shelton, Product Planning Director at MHR, explores how crisis management can be improved through automated solutions.

In any business, people are your biggest asset and your biggest cost.

It is why amid the turmoil of the coronavirus lockdown, business continuity has rightly focused on providing full support to millions of employees working from home.

The danger is that functions such as payroll and HR find themselves overlooked or overburdened. There’s often an assumption that these departments run on rails no matter what happens.

When almost everyone works from home, however, payroll and HR can be overwhelmed by the volume of queries about pay, expenses, bonuses, commissions, and the limitless range of concerns employees have about sickness pay, curtailment of earnings, family matters, and so on. This is compounded by changes in government legislation or rules about furlough or holidays that need to be considered. What is the right response from a technology perspective?

Cloud-Based Applications Are Proving Their Worth

It is imperative, therefore, that payroll and HR staff have access to the applications they use daily, so basic functions remain operational and they continue communicating across the business. But many organisations have found, to their cost, that remote working is not just a matter of lifting and shifting from the office to the home. A survey of companies with more than 1,000 employees last year found 52% were still using spreadsheets for payroll admin and more than a third were using paper timesheets. This is almost impossible to run effectively with a remote workforce. Businesses that have bespoke payroll systems operating from on-premises servers are suffering almost as badly, because these vital applications are now inaccessible.

The plain fact is that for many company payroll and HR departments there will be no alternative to the adoption of new, cloud-based applications that boost collaboration and streamline efficiency.

Implementation is swift. A major software and outsourcing provider with 650 employees has been able to shift to full remote working in three days, transacting more than 50 payroll functions quickly and seamlessly.

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Saving Thousands of Hours

A good example, from more normal times, is Swinton Insurance, which has 4,000 employees across the UK. It saved 132 working days through automation of absence authorisation and the introduction of digital payslips, having previously depended on spreadsheets. All the difficulties of employee queries and the confusion about the combination of pay and benefits were resolved through adoption of a cloud platform. The company’s HR department made the transition from a highly transactional unit to one helping drive up performance across the business.

Chatbots and Voicebots Offer Employees Instant Answers

Payroll and HR should also consider deploying chatbots and virtual assistant-type voicebots to help relieve them of the time-consuming burden of repetitive queries about pay and employment matters when employees are stuck at home. Within 24 hours it is possible to have a chatbot capable of answering 50 common queries. A more advanced cloud-based platform will offer these technologies. Employees can even upload receipts with a quick smartphone photograph, automating the administration of expenses claims and making the whole process much easier.

Security has long been the number one priority for organisations when building and maintaining an IT infrastructure, as they seek to ensure data privacy is protected in ever more challenging circumstances. In any given week or month, we now expect to see a headline reporting the latest cyber-attack or data breach, and it’s evident that a number of companies are yet to find a way to responsibly manage the growing cyber threat landscape. The financial services sector is particularly prone to such attacks given the vast amounts of sensitive information it handles. A global report from Accenture and Ponemon revealed that the average annualised cost of cybercrime for finserv companies is - at $18.5 million - over 40 per cent higher than the average cost per firm across all industries. As such, it is imperative that firms within the industry are  adopting the right technologies to protect themselves. Stephan Fabel, Director of Product at Canonical, explores the security benefits of financial services taking on new technology.

One of the most well-known security solutions used in banking and fintech today is encryption. The challenge, however, lies in bringing this level of security to the wider industry. Finserv customers expect robust security measures while still being able to benefit from  ease of deployment, flexibility, and agility - the combination of which can be a challenge for IT teams to achieve. Yet there are solutions to this issue. IBM has demonstrated one example, working alongside Canonical to provide fintech customers with the technology to optimise data protection and privacy across both containers and multi-cloud infrastructures.

The Arrival of Containerisation

The “secure service container”, developed specifically for container-based applications on IBM’s LinuxONE, offers developers a combination of hardware and software, thereby allowing them to derive the same quality of security that they would on Linux, and in any data centre - whether on-premise or in the cloud.

Finserv infrastructures of today and tomorrow are being built around Linux, precisely because it offers easy deployment alongside providing a highly functional and easily automated stack. Such capabilities have already drawn leading industry players such as Barclays to  build whole data centre infrastructures around Linux. In addition to  giving IT teams easy access to innovations and software frameworks, open source software also increases trust, which is essential for security compliance in the long term.

Finserv infrastructures of today and tomorrow are being built around Linux, precisely because it offers easy deployment alongside providing a highly functional and easily automated stack.

Equally, a further benefit of open source is the strength of its community of developers, which is very quick to identify and fix bugs or errors. This isn’t the case with close-sourced software, where access to the back-end is limited, making it difficult to assess the reasons behind any problems.

Above all else, containerisation enables finserv companies to unlock new levels of security, cost savings and developer efficiency. The majority of developers are not security experts, and are prioritising cost efficiencies when deploying new systems and applications. Containers allow them to move things to the cloud at the push of a button, and it will run as a virtual machine. Developers have not always  had the opportunity to take advantage of the advanced hardware security offered by such technology, which restricts entry to cyber criminals, even if they have physical access to computers.

As a result, it’s not surprising that banks and fintechs are turning to this technology to provide more robust protection against increasingly common attack factors, including malware, ransomware and memory scraping. A report last year from 451 Research highlighted this, with containers (29%) ranked alongside AI and machine learning (36%) as the financial industry’s top IT priorities.

Cryptography and Blockchain

We’ll also see additional threats come to fruition within the next decade or so, as the power of quantum computers becomes sufficiently capable to break all current cryptography keys. It’s essential that the finance sector remains ahead of the game and is prepared for this development in advance. Certain technology vendors have already populated their systems with such algorithms, moving from firmware into hardware. When quantum computers advance to the required level of power, businesses will need to decrypt all of their data, and re-encrypt it using innovative and ultra-secure methods such as quantum cryptography.

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Blockchain technology is also set to become one of the principal security algorithms within the banking and financial sectors. Ultimately, the goal is to enable organisations to operate, test and run analytics without data. The sector also benefits from the vast number of innovative new players coming to market and operating within the space - all of whom build their IT infrastructures on non-monolithic systems, thereby freeing themselves of the shackles of legacy systems.

Artificial intelligence has already made a significant, positive impact on the financial services ecosystem and we can only expect this trend to accelerate in years to come. AI has the potential to radically transform businesses but only if they deploy it with appropriate diligence and care. A 2020 report by EY and Invesco anticipates that AI will expand the workforce in fintech by 19% by 2030 as the industry stands to be one of the largest to benefit from the efficiency gains and innovation the technology can bring through operational optimisation, reduction of human biases and minimisation of errors in anomalous data. Alex Housley, CEO and founder of Seldon, further analyses the recent changes in the role of AI and the impact it is set to have on the finance sector in years to come.

Talent Shortage Within FS

According to a report by Bloomberg, listings for AI-based jobs within the financial sector increased by approximately 60% from 2018 to 2019. This demand for workers with AI expertise is not only seen within the financial industry but across a variety of other professional sectors, such as e-commerce, digital marketing and social media. The jobs market has had little time to respond, resulting in a shortage in access to talent. A study by SnapLogic found that whilst 93% of UK and US organisations are fully invested in the use of AI as a priority in their business, many lack access to the right technology, data, and most importantly, talent to carry these goals out. This ‘skills shortage’ is a major obstacle to the adoption of AI in business, with 51% of those surveyed acknowledging that they don’t have enough individuals trained in-house to make their strategies a reality. Machine learning can offer benefits in many forms and different businesses have varying needs. There is no ‘one size fits all approach’ when adopting and deploying AI, which can make it a costly process for many organisations not equipped with the right tools.

Fortunately, there is ample opportunity to enhance the responsibilities of numerous roles within their organisation or let employees get on with more strategic work. SEB, a large Swedish bank, uses a virtual assistant called Aida which is able to handle natural-language conversations and so can answer a trove of customer FAQs. This means customer service professionals have been redeployed to focus on complex requests and their more meaningful responsibilities. Even employees currently working within the industry are looking to broaden their skills to become more versatile across new technology-driven roles. In particular, financial services companies are looking to upskill their data scientists and analysts. They have the base skill set required and can do tremendously well with the right engineering support. Deploying artificial intelligence within a business’s infrastructure means it can take care of mindless, repetitive tasks and free up employees to focus on other, more rewarding parts of the business, maximising automation and cutting costs.

There is no ‘one size fits all approach’ when adopting and deploying AI, which can make it a costly process for many organisations not equipped with the right tools.

Enhancing Fraud Detection

One of the biggest use cases of artificial intelligence within financial services is fraud protection. With the rise of online banking and the exponential growth of digital payments, banks have to monitor huge swathes of transactions for fraudulent behaviour. This huge influx of data points poses major issues for the human brain but actually maximises the effectiveness of ML systems. We’ve seen significant growth in the use of deep learning, with most major retail banks now relying on machine learning tools to recognise and flag suspicious activity. To keep up with the pace of criminals and comply with stricter regulations, service providers have to look beyond traditional methods and implement hybrid strategies built around holistic understandings of behavioural and anomalous data.

Indeed, research by AI Opportunity Landscape found that approximately 26% of funding raised for AI startups within the financial services industry were for fraud or cybersecurity applications, dwarfing other use cases. This number is expected to rise as fraud detection and mitigation continues to be one the highest priorities for customer-facing organisations as consumers increasingly hand over their data in exchange for services.

Better Serving Customer Needs

Financial services companies are increasingly leveraging artificial intelligence to deliver tailored services and products for their client base. For those banks mining data effectively, AI provides the ability to serve customer needs across multiple channels, and in some cases to grow operations at an unprecedented scale. Tools such as chatbots, voice automation and facial recognition are just a few of the ways banks are using AI to streamline and personalise the user journey for their customers. Importantly, consumers are increasingly literate in automated services and their expectations are constantly rising as the technology improves, meaning organisations must constantly adapt or risk being left behind.

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Chatbots and voice agents are also able to detect and predict changes in consumer behaviour, giving feedback on each interaction with a customer. All the results from customer touch-points are shared across the organisation, ensuring decisions and recommendations involving a human or machine are more intelligent and precise. Over time, these analytics mean businesses can make real-time decisions with their customers in mind, boosting engagement and personalisation.

In order to detect customer data from online purchases, web browsing and in-store interactions, banks must have AI in place to collect the data and automate decision-making. By adapting these technologies banks can connect their data, amplifying their offering effectively across all channels.

Continuous Adoption of Artificial Intelligence

Artificial intelligence and machine learning have already enhanced numerous capabilities for the financial sector, improving recommendations, customer experience, and efficiencies via  automation. AI will continue to dominate different parts of the financial sector, and the acquisition of machine learning and data science talent will become the norm. A recent survey from the World Economic Forum attests to this, with nearly two-thirds of financial services leaders expecting to be mass adopters of AI in two years compared to just 16% today.

Acquiring the right talent to drive machine learning and AI in organisations will remain a challenge as innovation is focused in different areas and new technologies are being implemented. In lockstep with this will be the constantly evolving regulatory landscape surrounding adoption of AI in financial services as each side races to match and often contain the other. However, the multiple benefits that come from implementing AI and machine learning are clear, and it will be a key area of focus and growth for businesses within financial services over the next decade.

Fintech is one of the most recognisable terms in the financial services industry but sits aside its lesser-known compatriots, RegTech and InsurTech. Put simply, these terms represent the evolution and revolution of financial services globally, and the UK has firmly embraced the use of such advances. Evolution relates to the giants of the UK financial services industry who have been around for over a hundred years and revolution reflects the large number of start-ups who have not had to adapt old systems to new ideas but have had a clean sheet from which to design a process and solution using the latest technology. Simon Bonney, Partner at Quantuma and member of IR Global, explains to Finance Monthly how fintech has transformed the industry.

Background to the UK Fintech Industry

The UK fintech industry is worth around £7 billion and employs over 60,0000 people. It now has banks that only communicate with their customers through an online platform and have no physical branches.

The UK thrives as a leading global fintech hub for a number of reasons. As a world leader in the financial services industry, there is an imperative to ensure that we invest in, and utilise, the latest technology to facilitate our competitiveness. As well as a deep homegrown pool, the UK attracts a wealth of entrepreneurial and tech talent because of its status (42% of workers in UK fintech were from overseas in 2018), and also its investment. Investors put more money into UK fintech than any other European country in 2018 ($3.3 billion). In addition, the UK recognises the importance of striking a balance between the promotion of entrepreneurialism and the regulation of new ideas to provide confidence to businesses and consumers the world over through the Financial Conduct Authority (FCA). The FCA’s regulatory sandbox, the framework to allow live testing of new innovations, has become a blueprint for fostering innovation around the world.

The Opportunity

The UK Government has recognised that fintech engenders a significant opportunity to create jobs and economic growth and also facilitate the birth of new start-ups in other industries which are able to utilise new technology to make their costs quicker and cheaper. In 2019, 79% of UK adults owned a smartphone and on average they spent over two hours a day on their phones. Access to financial services by smartphones, coupled with a loss of confidence in the traditional financial services industry following the Global Economic Crisis in 2008, has meant that consumers embrace the relative ease and convenience of fintech.

Technology generally has changed the way that consumers expect to engage with financial services and the UK financial services industry has recognised that it cannot operate the same way it did 10 years ago if it hopes to keep pace with the demands of customers. Fintech has changed and will continue to influence the experience and speed of transactions. It has had a significant impact on the cost of operations. For those businesses with legacy systems, there is a huge challenge in ensuring that fintech is embraced and implemented. In order to cope with this challenge, it is likely that banks will seek to further outsource their operations and hand over management of their legacy systems so they can focus on serving customers and finding new routes to market.

Potential Challenges

Growing opportunities do not come without hurdles. The sheer speed of change in fintech means that regulation is generally trying to catch up, and in a number of instances, such as cryptocurrency, regulators are required to learn about the technology and the way it encourages people to behave before being able to effectively regulate it. However, that regulation will have an impact on development, as the costs of ensuring that new products are compliant will provide a barrier to entry. In addition, fintech is inextricably linked with data and the use and regulation of data will continue to feature in the spotlight.

A Note on Fintech Bridges

It is hoped that through the use of fintech bridges, the UK’s best and brightest fintech ideas and businesses will be able to thrive internationally, with automatic recognition by the regulators in those partnering countries. Collaboration has been a feature of the success of fintech, with open source solutions being made available to enable the improvement of all aspects of the industry for the greater good with blockchain being a prominent example. Collaboration on an international level should only provide a more stable platform for that innovation. However, Brexit has raised questions regarding the future of the UK as a behemoth of the financial services industry, and the nature and mobility of fintech and the use of fintech bridges means that competition has been increased across the world.

The UK has been able to remain at the forefront of fintech due to its history in financial services and its depth of talent and investment. Importantly it recognises the importance of remaining at the forefront and will strive to ensure that innovation and regulation continue to go hand in hand.

As the Coronavirus (COVID-19) pandemic continues to spread there has been a worrying rise in harassment, bullying, and discrimination in the workplace. Initially, this was seen to be race-related - targeting people of Asian origin - but has since spread to include people who expressed symptoms of the virus. Now as large swathes of the global workforce move to a working from home model, employers are faced with a new challenge - that the vector for workplace discrimination will shift in parallel with the main mode of communication. Neta Meidav, co-founder & CEO of Vault Platform, explores this phenomenon below.

Tasked not only with rapidly implementing a company-wide working from home strategy to keep businesses that are still operational up and running, many HR functions are also operationally responsible for mass layoffs all while building a crisis information and communication plan out. Bluntly, HR teams are maxed out and will struggle to field a rising number of queries about the new workplace etiquette.

Law firm Lewis Silkin LLP estimates that around 59% of large multinational enterprises have already put into place a plan to respond to pandemic diseases such as Coronavirus. Typical measures include social distancing and remote working arrangements. The majority (88%) of are managing self-isolation by asking employees to work from home.

It’s difficult to actually get a handle on the number of people whose jobs allow them to work fully remotely, especially with such an unprecedented situation. But cloud security services firm Netskope, which routes corporate traffic for hundreds of thousands of office workers said it estimates that the number of American knowledge workers (white collar desk workers) logging in from home hit a high of 58% on March 19. This is up from an average of 27% over the last six months.

While there may be some anecdotal evidence that the untested shift to an emergency working form model is in fact working, it is early days and there is plenty of research that points to warnings we should all be heeding.

Bluntly, HR teams are maxed out and will struggle to field a rising number of queries about the new workplace etiquette.

A 2017 study by David Maxfield and Joseph Grenny for leadership training consultancy VitalSmarts found that just over half of people who work mostly remotely feel they don’t get treated equally by their colleagues. Now the obvious retort is that ‘we’re all remote workers now,’ so the playing field is levelled. But research suggests the problem is more with the medium than whether workers fall into the ‘in office’ or ‘WFH’ camps.

Some 30% of UK respondents to a survey by Totaljobs in 2018 said they had been victims of workplace discrimination on official corporate messaging platforms, such as Slack, Microsoft Teams, or Google Chat. In the US, a 2019 survey by Monster.com revealed that 39% of respondents had received aggressive messages from colleagues on similar tools.

Cyber-bullying has been well documented for some time and remains as persistent in the corporate workplace as it does in schools and colleges. A recent high-profile case focuses on the departure of the CEO of leading consumer brand Away after an exposé of bullying culture over Slack.

The revelations of Away are an anomaly - most incidents go unreported. The same studies show that 30% of workers in the UK (according to Totaljobs) and 34% in the US (according to Monster.com) who do experience cyberbullying suffer in silence because they are not confident they will be supported by their employer. Lloyds of London was exposed in December last year after their complaint hotlines were proved to be inoperative for 16 months due to unpaid phone bills, and in 2018 the Financial Conduct Authority put senior managers on notice that their futures in the City were at risk if they did not take diversity seriously, while companies faced fines after a 220% increase in interpersonal whistleblowing complaints over the previous 12 months. According to Totaljobs, around 8% find it easier to leave their jobs than to complain and request an investigation into the situation.

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Digital workers are disincentivised from reporting workplace misconduct in the same way as employees that spend all their time in the physical presence of their colleagues. Firstly, the available channels for reporting misconduct are intimidating; and secondly, they don’t feel confident their employer will act on the report.

But the fact remains that employers are legally obliged to protect their workers and that responsibility doesn’t change because they are now out of sight. While ethically, employers should take more care during these uncertain times.

• Remind your employees of your organisation’s discrimination and harassment policies and ensure that these are adapted for a remote-first culture (i.e. how they apply to discrimination across messaging apps) and are easily available.
• Encourage a speak up culture: stigmatising issues (such as with race-related discrimination due to COVID-19) can be challenging for employees to report. Without effective reporting tools in place, many will suffer in silence.
• Take reasonable steps to prevent discrimination and harassment : Typically, employers will only avoid liability in the event of a discrimination case if they can show they have taken ‘all reasonable steps’ to protect employees, such as implementing an effective and secure solution for reporting sensitive issues that take place in person or digitally.

The figure is the average of 10 FinTech leaders' individual predictions, who speculated what might be in store for the coin in 2020 in a new report from financial comparison website Finder.com. With Bitcoin’s recent price decline, nearly everyone on the panel (90%) agreed Bitcoin has not been immune to corona-triggered asset sell-offs.

Technologist and Futurist at Thomson Reuters, Joseph Racynski, noted that in the current climate institutional investors were quick to dump Bitcoin.

“The reason for the drop in BTC price is a direct result of institutions unloading the coin in a rush to cash as soon as the virus impact was identified. It happened across all assets, but what it proved was that institutions actually did invest over the last few years in crypto”, he said.

However, just half the panel (50%) say the decline is a result of Bitcoin's failure to hold its price as traditional markets drop, suggesting Bitcoin might not be simply mirroring the equities market.

Either way, recent price movements have impacted Bitcoin’s viability as a safe haven asset, according to a panel majority (60%). Managing Director at Rogue International, Desmond Marshall, said techies and coin buyers wishfully hope bitcoin could become a safe haven asset like gold.

Recent price movements have impacted Bitcoin’s viability as a safe haven asset.

Meanwhile, Co-founder of Finder, Fred Schebesta, said that a short term correlation with traditional assets does not diminish Bitcoin’s status as a safe-haven asset.

“Aside from Gold, the list of alternative assets to consider as a hedge against uncertainty in the global markets are far and few between. To me, Bitcoin remains one of the most attractive assets to help diversify a portfolio looking to hedge risk in the coming years”, he said.

Managing Director at Digital Capital Management, Ben Ritchie, conceded that Bitcoin is currently seen as a high-risk asset but argued it could be a safe haven down the track.

“Bitcoin is being positioned as a future safe haven but currently is considered as a high-risk asset", he said.

“The recent short-term liquidity impact contributed to its correlation to equity markets and does not impact its future viability to become a safe haven. It continues to trade more in line with risk assets than safe havens, which is consistent with its performance to-date in periods of extreme market volatility… It is interesting to note that even gold has suffered from violent price fluctuations recently dropping approx 12% before bouncing off its 50-week moving average.”

While the panel was divided on the future of Bitcoin, they largely agreed that market conditions will eclipse any hype as a result of the halving.

COO & Co-founder at MarketOrders, Julia Sukhi, was just one of two (20%) panellists to say recession fears won’t nullify hype around the halving.

“As markets become weaker and chaotic, there will be certainty in the BTC markets in terms of the halving so more attention will be attracted to this event”,  she predicted.

Dermot O’Kelly, Senior Vice President, Europe at Finastra

Think your organization hasn’t embraced AI? Think again. The reality is that there are hundreds of applications of artificial intelligence embedded in everyday organizational life. From pay-per-click ads to social listening, chatbots to lead scoring, biometric security to network attack detection. As Europe at Finastra's Senior Vice President Dermot O'Kelley outlines below, the chances are that your organization is already relying heavily on AI for a range of functions. 

It’s true that many of these services may be provided by third parties connecting directly to systems via open APIs. The organization therefore doesn’t need to become the expert. In fact, there is a proliferation of external experts as AI becomes ever more accessible. In less than two years, training time for machine vision algorithms dropped by over 99%. It went from three hours to just 88 seconds – whilst computational costs dropped from ‘thousands of dollars to double-digit figures’.

It therefore comes as no surprise that organizations are looking at how they can benefit from the AI revolution, to help boost areas such as operational efficiency, security, predictive capabilities, product development or customer satisfaction.

In less than two years, training time for machine vision algorithms dropped by over 99%.

Leading the way is the financial services sector, not least because of the vast amounts of data held by legacy organizations, but also in response to the changing expectation of consumers. Tech giants created new models of engagement, platforms that consolidated services and captured data to further fuel predictive capabilities, and this expectation of convenience is now shifting to financial services, where consumers are now more than comfortable with concepts like robo-advisory. Institutions, regardless of whether they’re providing retail services, lending, trade finance, wealth or any other line of business, are racing to adopt similar models without relinquishing customer data.

As data proprietors, the world of opportunity that AI affords any organization is immense. Data is the new currency as we enter the fourth industrial revolution, and all AI applications rely on huge amounts of data to function well. So, why aren’t all organizations rushing to embrace AI?

• Firstly, the lack of appropriate, compliant data. Successful AI models require tens of thousands of records, cleaned and labelled, that have been captured and stored according to strict regulatory conditions.
• Secondly, the growing urgency for transparency and accountability in data, models and decisions to stop the cumulative effect of bias. Best practices are offered, but as yet there is no universal regulation or consensus.
• Thirdly, the ethical implications - just because you can doesn’t automatically mean that you should, particularly where privacy is concerned. As Cap Gemini noted, consumers are attuned to ethical practices…get it wrong and the trust – and business – is lost.
• Finally, the well-documented shortage of skilled AI and Data experts. Thankfully, through open APIs, all organizations can connect in AI-based capabilities developed by specialist third parties – it doesn’t always pay to build in-house.

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The intelligence race continues unabated, with escalating VC investment in AI and new, exciting applications that are having tangible success. Still not sure what Artificial Intelligence can do? Very soon it will be easier to recall the few things the technology can’t do.

Here Gareth Jones, Chief Information Officer at Fraedom, explains how banks can move to the cloud in stages, picking the most pressing workloads and moving them to the cloud incrementally, and adopt a hybrid technology infrastructure, touching on the inherent benefits therein.

Banks have traditionally been reliant on legacy systems, however, now almost half (46%) of bankers see these legacy systems as the biggest barriers to the growth of commercial banks. Technology is becoming an integral part of the banking industry and the pressure is on for these institutions to innovate and adopt the latest capabilities. Therefore, banks must overcome the reluctance to make changes to their IT infrastructure.

As new challenger banks increasingly launch directly to the cloud and consumers demand the latest technologies, it’s time for traditional banks to consider migrating to the cloud. Here’s how they can do this and the potential benefits they can expect to experience:

An incremental move to the cloud

Fortunately, banks needn’t see the adoption of the cloud as an all or nothing venture. Instead, it is possible to migrate in stages. Vitally, banks must acknowledge that doing a ‘lift and shift’ will offer limited benefit to their organisation or their customers as their workloads won’t be cloud-ready or scalable. Banks should see the move to the cloud as a gradual transition and start by migrating the most pressing workloads and services to the cloud in a controlled manner. This will ensure workloads are moved across securely, nothing is lost in the process and that customers aren’t impacted by significant periods of downtime. This will result in the adoption of hybrid technology infrastructure, at least in the short-term, which research by IBM found that 87% of outperforming banks are using to reduce operational costs. This approach is favoured by more than two-thirds of global banking executives surveyed by Accenture who intend to operate in a “bimodal” way — maintaining key legacy systems and those not easily replicated on cloud platforms, while transferring other systems and adding new applications in the cloud.

Fortunately, banks needn’t see the adoption of the cloud as an all or nothing venture. Instead, it is possible to migrate in stages.

As many banks are reliant on legacy systems, moving to the cloud, even as part of a gradual transition, can seem daunting. Therefore, seeking assistance from third-party fintechs that are much more accustomed to the technology and have the experience of carrying out many cloud migrations, can help to ensure that the process is smooth and secure.

The benefits of the cloud adoption

Cost reduction

One of the most significant benefits of the cloud is its potential to help banks reduce core costs, particularly those associated with delivering new solutions, as well as overall operating costs. This is due in part to the fact it removes the cost of the upgrade cycle that comes with physical infrastructure. It also means banks no longer need on-site infrastructure management, allowing banks to focus resources on value added functions more closely aligned with their core business objectives. In the long-term, cloud adoption can help banks enhance customer satisfaction and bring products to market faster, therefore allowing them to maximise return on investment.

Scalability

A further benefit of cloud adoption is increased scalability. Currently, organisations not utilising cloud services must invest in additional hardware in order to scale. This incurs a greater impact in time and money. Adopting cloud allows banks to scale on-demand, with cloud services able to expand and contract as needed almost immediately. This provides a far better capability to manage costs in line with user and business demands.

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Agility and innovation

Legacy systems are still largely important to many banks’ daily operations, but moving to more agile systems is essential to growth and innovation. Therefore, migrating to the cloud helps banks overcome this issue, whilst also offering additional cost-savings.

With so many benefits, traditional banks can’t afford to ignore cloud technology any longer. While legacy systems may have once played an integral role in their business, these systems now widely act as inhibitors. A gradual transition to the cloud will enable increased operational efficiencies, while also providing the infrastructure through which they can begin to foster the same level of innovation as their cloud-native competitors. This will allow traditional banks to not only keep up with the changing technological landscape, but the ability to develop more innovative products and services faster will also help them to answer customer demands and compete with challenger banks.

As we celebrate the last decade of fintech, one thing that has stood out is the impact digital lending has had on consumer lending habits - and their options. With more financing options available than ever before, the market is fraught with lending options to suit each need, credit score and repayment condition. Online instalment loans have exploded onto the scene, giving credit card usage a run for its money, while peer to peer lending platforms are now the norm.

In the industry, experts are already looking ahead to 2020 and beyond, predicting the prioritisation of financial health and the vertical integration of fintech across other key industries such as healthcare.

Here are some of the decisions consumers need to keep in mind when considering the multiple fintech credit options available today.

Explore Their Choices

By the end of the first quarter in 2019, 19.3 million Americans had at least one personal unsecured loan outstanding, mainly thanks to the rise of fintech. Wider access to finance options has meant that more of them are turning to personal loans as they continue to live paycheck to paycheck. However, as with most personal unsecured loans, they come with a higher price tag. For unsecured personal loans, the interest rates can range from 5 percent to as high as 36 percent, much higher than the average 19 percent credit card interest rate charged for new credit card accounts. This makes it even more important that consumers do their due diligence when searching for the best loans online.

In 2019, Bankrate put the average interest rate for personal loans at 11 %, and with the influx of online instalment loan lenders, there are even more options with lower rate options. For years, consumers looking for additional finance have thought that high-interest credit cards were their only choice. Now, with the aid of online comparison platforms, consumers can easily find an interest rate they are comfortable with, and more importantly, there is more transparency when it comes to the cost of choosing that particular route.

In 2019, Bankrate put the average interest rate for personal loans at 11 %, and with the influx of online instalment loan lenders, there are even more options with lower rate options.

Check Repayment Terms And Conditions - Including Early Settlement Charges

Yet, this does not mean that borrowers are any more knowledgeable when it comes to the terms and conditions of the loans they are borrowing. In fact, in the United Kingdom, 60 percent of them do not know the rate of their loans, according to research from Mintel, while in the United States of America, Americans are similarly ill-informed. The same can be said for their financial health. In 2019, 43 percent of them didn’t know their FICO scores, a key determinant of their creditworthiness for a personal loan.

However, checking credit scores is now simpler than ever, thanks to credit bureaus and lenders like American Express offering online or mobile login and checking features. Most major credit card issuers offer a view at consumer credit scores from at least one of the three main credit bureaus. Similarly, checking the fine print of personal loans such as passed on charges or early settlement charges that may drive up the total cost of the loan are important. For example, three out of four student loan borrowers (including private loans) do not know what effect their death would have on their loans.

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Assess the Impact on Their Credit Score

Fintech lending options are not only lowering the costs of borrowing, but they are also minimising the reliance on credit scoring as a main determinant of loans. This means borrowers with no past credit scores or a low score can easily get a personal loan, whether it is backed by traditional lenders like the bank or more modern peer to peer lending platforms. This does not necessarily signify that the standards of credit scores have completely been erased. Today’s fintech borrower has a FICO score of 650, compared to the 649 FICO held by traditional bank borrowers. However, a lender with a good credit score may also want to consider the additional credit options open to them, such as approval for credit card offers with 0 percent purchases and balance transfers, lowering the overall cost of borrowing.

Finally, it is interesting to note that the age market that currently holds the largest share of the fintech personal loan market is Gen X (ages 38-52) and Gen Y (ages 24-37). This captures the most tech-savvy and outspoken demographics of the market, matching up perfectly against the transparency and personalisation that fintech loans now offer.

However, even with these added benefits of fintech borrowing, there still remains a basic question that consumers must answer before they enter the world of borrowing: what is the best personal loan option for me?

The rallying call from Nigel Green, founder and chief executive of deVere Group, comes as world leaders, CEOs, academics, influencers and celebrities head to the Swiss mountain resort of Davos for the 50th annual World Economic Forum (WEF), starting Tuesday.

Mr Green comments: “As it celebrates its landmark 50th year, the World Economic Forum 2020 has the opportunity to champion and enhance the transformation of business, which has been dubbed the ‘Fourth Industrial Revolution.’

“We’re living through a pivotal moment in history in which increased and advancing technology is monumentally and profoundly changing the way we live, do business, and interact with one another.” 

He continues: “We can clearly see seismic shifts happening in the financial services industry – a sector trade and commerce is deeply reliant upon.

“The vast majority of this change is being driven by financial technology, or 'fintech.'  Mobile banking and investment apps, peer-to-peer lending, cryptocurrencies like Bitcoin, robo-advisers, and crowdfunding are all part of this fundamental shake-up of the space.”

Mr Green goes on to add: “The momentum and energy of this evolution now needs to be harnessed by delegates in Davos.

“They need to commit to fintech by using their time, energy and resources for its research and development for three principal, positive reasons.

“First, it benefits society. Fintech can speed up the pace of global financial inclusion. It can provide access to financial services for millions of people who live in remote areas and/or who might normally not be able to use financial services because of historical biases of traditional financial companies. Helping individuals, firms and organizations successfully manage, save and invest can only result in better, stronger and more stable communities for us all.

“Second, fintech offers companies the opportunity to be agile, to diversify, to cut costs, and to meet regulatory requirements all whilst improving the client experience. This will help them thrive in rapidly challenging times of change and disruption.

“And third, the revolution is happening with or without them. As consumers, we increasingly want all our financial services needs to be dealt with online and/or on their mobile devices. We demand personal service and instant access anywhere and at any time. This trend is only set to grow as we all become increasingly dependent on tech.”

The deVere CEO concludes: “Davos 2020 is the ideal forum in which to unite the best political and business leaders to galvanize the positive potential of the fintech revolution.

“With a slowing global economy, it is an opportunity that the world cannot afford to miss.”