A few months ago, one of my colleagues asked me “Do we have a document on what we think Banking will look like in ten years?” My reply at the time was “No, we don’t, but I’m sure we could have if you felt one would be useful. Well, here it is.
“Predictions are risky, particularly ones about the future.” That's probably not an original phrase but certainly associated with the former U.S. Vice President, Dan Quayle. So clearly, there is some personal bias and naturally a focus on the role of data and analytics in what we see as the key themes for financial services over the coming years.
However, there are huge opportunities for transformative change in Financial Services
and these are probably only exceeded in volume by the hype surrounding some of the underlying capabilities – blockchain, “artificial intelligence”, digitization and so on. As someone who has managed to navigate a career from the CRM hype of the 1980s all the way through the dot com, “big data” and now Fintech and AI booms, I personally remain to be convinced that Financial Services is going to have an “Uber moment” in the same way that some industries have been transformed. However, the rise of challenger banks, Fintech and perhaps more significantly, the platform providers such as Amazon, Apple and dare I say Facebook suggest something - that at the very least, incumbent institutions may find their customer bases being cherry-picked based on high value and lower (or perhaps better understood) risk customers.
To keep up as a whole industry, Financial Services have to put analytics front and centre. They have to get beyond getting “agile, or “understanding their customer” and really hit the nail on its head when interacting with their audience. This requires change throughout the organization and not only in the IT department. The concept of Teradata’s Sentient Enterprise provides a conceptual vision enabling them to truly make use of their most important asset: Data.
Transformation takes time and careful planning. However, one of the things that Teradata does for our clients is help them develop analytical roadmaps. Companies who want to compete in today's fast-moving business environment will need to operationalize their analytics quickly and effectively. However, many customers do not have an explicit analytics strategy. Therefore, one of the things we’ve included in our discussion is a high-level roadmap for Financial Services companies on their way to leveraging the power of Data and Analytics.
There may well be changes to the details over the next ten years - it’ll be interesting to look back when I’m older and greyer and see how close we were to reality. It’ll also be interesting to see if today’s incumbents with hundreds of years of history and experience are thriving or just surviving.