While I’m no finance whiz to fully get the complicated workings of the latest financial software, I’m aware of the negative impact such absences would have on both consumers and employees.
Think about these: long queues at banks to withdraw / transfer money because there’s no such thing as ATMs or internet banking, writing a huge chunk of data on pieces of papers and doing manual calculations because there is no Microsoft Excel equivalent, trading transactions limited to bartering cows and chickens because a real-time virtual stock market doesn’t exist…
There’s no doubt the financial industry wouldn’t be what it is today without technology; whether it’s businesses or individuals, transactions have to be fast and secure.
A friend of mine told me that he uses the SAS language data analysis tool and the Oracle/Hyperion business reporting tool in his day-to-day work in the banking industry. The tools can analyse millions of data points within minutes, which help review and summarise information in bite-sized outputs.
With such small and concise pieces of information, he’s able to understand and present his recommended strategies in record time!
Sounds complicated, but that’s the reality of the industry today –it’s constantly evolving to scale banks’ (and its people’s) level of competitiveness and fine-tune overall industry performance.
For instance, mobile banking has not only enhanced local banking services in East Africa, but innovations such as M-Pesa in Kenya have ensured that more people have bank access.
Within the finance industry itself, the rise of IT trends such as e-banking solutions to integrate with existing products, business process management tools to harness a large amount of data, and message centres for secure communication between a bank and its customers, will become increasingly relevant.
Touching on technological innovations closer to home, DBS took top spot with Capital One in a study of 50 global banks’ smartphone offerings for private banking clients. Last year, their customers were victims of ATM fraud, leading to the introduction of new measures, such as SMS alerts for withdrawals to enhance security. OCBC recently launched an online tool, OCBC Money Insights, for its e-banking customers to track their spending.
Technology is closely linked to people, and vice versa. The innovation of technology only goes as far as people’s willingness and ability to adapt – and this is highly necessary in order to remain relevant within the industry and wage market.
A survey in the US found that more than 50% of people do not trust the financial services and banking industries, while technology is the most trusted for the sixth consecutive year. This led the surveyors to believe that if Wall Street embraces technology, it will alleviate the level of distrust among users!
Then again, the case should not be such that human abilities remain the same while technology continues to advance, as highlighted in this article.
Having the skills in using an industry-wide software can also scale an employee’s value in the job market.
Knowledge of Bloomberg Terminal for instance, not only allows professionals to stay on top of the financial market and news within personal and professional capacity, but serve as a valuable skill worth highlighting in resumes.
Where necessary, technology will also replace human resourcing to meet the increasing shift in power to consumers. In 2010, Amy Errett, a partner with venture capital and private equity firm Maveron LLC, listed a few changes in the financial services sector that she believes will lead to massive consumer innovation.
Recently, online investment platform Motif has ‘pioneered ideas-based stock investing’, allowing people to invest in themes, rather than companies or sectors. The platform has the ability to organise stock investments into topical portfolios or ‘motifs’, designed to lower the cost of trading as well as management fees.
But to be honest, not many of these innovations would ever see the light of day without proper government support.
In 2000, MAS held its Technology in Finance (TiF) dialogue session with industry players to discuss key technological innovations important to the financial industry.
“MAS observed that consolidation in the financial landscape has resulted in financial institutions increasingly farming out routine back office processing activities. This has led to greater economies of scale, and allowed organisations to focus their resources on core competencies.”
In any case, 13 years on, Singapore has grown into a strong financial hub, so much so that it can now serve as a strong foundation for the country’s mission to become a global Intellectual Property (IP) hub.
No doubt, projects encompassing the stipulated areas (wireless electronics, mobility technology, etc.) will certainly expand on the finance industry’s current technology and continue to scale people’s expertise.