At last week’s World Economic Forum in Davos, the official theme of the meeting was “mastering the fourth industrial revolution”, also known as Industry 4.0. Leading global thinkers have defined this as a new era in which increase of automation and agility will transform and disrupt business. According to a report featured in the Telegraph last year, adopting ‘the fourth industrial revolution’ could add $14.2 trillion to the world economy over the next 15 years.

At the same time, the complexity around regulation, globalisation and continual shifting of economic conditions make it more challenging than ever to survive, especially in the financial services industry. The technology at the heart of the ‘fourth industrial revolution’ can help businesses manage this complexity, by streamlining processes, and providing quick, cost effective and scalable solutions. It can also consolidate and automate tasks to comprehensively meet regulatory requirements, efficiently manage collateral risk, minimise exposure and stay ahead of regulatory change.

There is increasing recognition of the importance of technology as a business transformation tool.  A November 2015 global survey of 250 business leaders, by Harvard Business Review Analytic Services, showed that two-thirds believe their company’s future depends on the quality of their software.  Software services will free up institutions from building and maintaining their own supporting IT, bringing them the benefits of scalability, reduced capital investment in hardware and infrastructure and more time for staff to focus on customers rather than IT.

However, with regulation becoming tighter, financial institutions must ensure that compliance considerations are at the centre of their technology strategies.  Financial institutions face intense regulatory scrutiny, and must conform to stringent operating standards and process requirements. Heads of risk and compliance have to demonstrate strong risk oversight which identifies and remediates exposures efficiently. Institutions will see that holding and managing their information digitally gives them a more reliable, searchable record of activities; ever-important in a regulated environment.