Highlights - 04/24/2018

Learn about the Technologies that are impacting the Financial Services and Capital Markets

Regardless of your relationship with technology, the growing impact it has on our lives and the corporate world is increasingly evident. Technology allows transactions to be executed more quickly, reducing costs and the number of operational errors.

Within this backdrop, we highlighted which technologies should be trending in the financial services sector and capital markets in the coming years. Is your company prepared for this technological revolution?

  1. Artificial Intelligence (AI). With the potential to redefine business models, all areas related to artificial intelligence are increasingly advancing, leading more and more companies to adopt AI in their strategies, products and services, specifically in the financial and capital markets. The use of this technology is focused on higher productivity, simplified and automated processes, risk management, compliance, support in decision-making processes and customer knowledge.
  2. Digital Transformation. Over the last decade, we have witnessed the launch of a number of digital devices including smartphones, tablets, smart TVs, speakers such as Alexa and dozens of other “smart” devices. There are also many applications that simplify and put a multitude of services at our fingertips. As customers become more digital, more demanding and more technology savvy, companies are pressured to significantly increase their digital efforts. The financial services sector and capital markets are no different. Financial institutions around the world are aggressively investing in digital transformation projects.
  3. Mobile. Within the digital transformation wave, choosing whether or not to offer products and services over mobile channels is no longer an option. Today, using only one mobile application/platform is no longer enough. Reducing friction in the use of financial services, through mobile applications that make life easier for the customer, is key, with focus on the user experience on a friendly and simple interface. Possibly the biggest examples in the industry are banking services, like one-click payment solutions and peer-to-peer money transfer through the use of biometrics.
  4. BaaP & APIs. Bank as a Platform (BaaP) is the idea that banks can distribute their own products, as well as third parties, through open APIs, enabling the exchange of information from their customers with several suppliers. APIs provide support for innovative solutions that would unlikely be offered without the opening of the banking system. More and more banks are partnering with financial technology companies through open APIs.
  5. Big Data & Data Science. With the significant increase in data volume in recent years, big data and data science should have an even greater role in corporations. For companies looking to rationalize operations, specialists rely on technologies that assist in the analysis of a large quantity and variety of data in real time, enabling them to identify the most efficient products and how to improve customer experience. These big data initiatives are promoting more sophisticated business models.
  6. AR & VR. Another trend for the medium and long term is the use of augmented and virtual reality in the work environment. Today, there has already been some attempts to put these technologies into practice, such as the use of holographic media platforms for financial negotiation. The augmented reality, interaction via voice and gestures are aimed at better visualization of data and insights generated by AI.
  7. Blockchain. At a fundamental level, Blockchains form a decentralized system for managing and authenticating information. Within a blockchain network, ‘smart contracts’ replace the need for a third party by providing a simple but robust network that automatically checks and authorizes transactions. All data generated through these interactions is stored and recorded in an encrypted digital “ledger” that protects against the threat of tampering and intrusion. The opportunities for the financial services that invest in such technology are enormous, such as cryptocurrency, insurance, registries and stock exchanges. Of course there are still some big questions to be answered in terms of scale, performance, security, but investments and the maturation of this technology should address those issues.
  8. Biometry. Security is always a concern for companies and customers. Biometric authentication methods help simplify and strengthen security processes. In that sense, players in the financial services sector must increase their investments and the integration of technologies that allow biometric authentication to their products and services like the use of digital and facial recognition.
  9. IoT & 5G. IoT, or the Internet of Things, where devices and sensors communicate with each other, is a link between the real world to the digital world. These interconnected devices should create a range of business opportunities and models over the next few years. The technology that must support the IoT is the 5G Internet network, which has the potential to be almost 10 times faster than 4G.

Authors: Thiago Trida, Marcele Magalhães and Felipe Furlan