The last decade has been a tumultuous one for financial services, not least in the field of technology. The meteoric rise of mobile devices, social media and online banking has changed the way consumers live and interact with financial services organisations. Customers are no longer happy to settle for written correspondence, face-to-face meetings and ‘memoranda to the manager.’  Disruptive technology has meant speed and personalisation are a prerequisite for service.

When referring to disruptive technology, we’re considering advances in the use or deployment of technology which enables people and businesses to achieve things they couldn’t before. They become disruptive when their emergence, rapid or otherwise, causes a genuinely new market opportunity for those with enough vision and bravery to take it. Not all new technology is disruptive – and sometimes it’s not the technology but the way it’s used that causes the disruption.

Financial services organisations are conservative by nature. New technology or new use of technology is often treated with some skepticism until it’s proven – by which time they will be chasing the tails of early adopters.

Below are some of the top examples of this technology, the benefits it brings and the reasons the industry should overcome its reticence:

• Mobile applications are now a dominant force in how users interact with their providers. To keep customers engaged on the application, the information it provides must be accurate, up-to-date and materially relevant at all times. Organisations should target individuals rather than demographics to avoid repeatedly presenting irrelevant offers.
• Social media provides an opportunity to gain in-depth product and service feedback from customers in real time. By keeping their finger on the pulse, organisations can paint a clear view of advocates and detractors and track whether they are meeting their engagement targets. It’s also particularly helpful in improving product offerings.
• The internet of things is already making its presence felt in the insurance industry: through the use of telematics data to determine vehicle insurance rates, for example, or health related data for life insurance. By consuming fitness tracker data, for example, insurance providers can better calculate risk and refine existing products which helps them to generate new revenue streams based on a particular user’s lifestyle.
• Omni-channel engagement is here to stay as traditional models of interaction recede. Users are looking for self-driven engagement regardless of platform, technology or contact method. This means a need for up-to-date, accurate and relevant data on demand, so that users can self service their needs.
• Cloud computing has transformed many commercial business operations, but it has yet to achieve the same level of adoption in financial services. Despite the highly regulated landscape, the benefits are clear. Using the cloud to power charging methods like contactless and phone-based payments can make it far easier to deliver new projects and capabilities than legacy systems ever could.

There is a common factor in all of these disruptive technologies – they all either generate or consume data in new ways. Gaining and maintaining relevance in this new era means embracing new techniques, including text analytics for unstructured data, low-latency processing for IoT data and adopting strong data management processes.

Into the future
So what’s new? Aren’t we aware of all of this already? Financial services organisations know of these technologies’ existence – but how are they really adopting them, let along using them to generate real business value? While many other business sectors are already reaping the benefits of these disruptions, financial services has not yet fully grasped the value they could bring.

In banking most of the serious back office processing is still done using on-premise solutions and only some front office capabilities are available through cloud apps. As a result of this half-hearted implementation, potential additional benefits – such as linking data from new technolgy with existing sources of data – are being missed.

Although disruptive technologies can change the game in how data is generated or consumed, the same underlying principles remain on how value is extracted from data – in order to truly make the most of what’s on offer, early adopters need to quickly show where the benefit is for the organisation – and how these new assets are becoming indispensable.