Long reads

A Financial Services Outlook for 2021 and Beyond

Keith Pearson

Keith Pearson

Head of Financial Services EMEA , ServiceNow

A year ago, nobody could have foreseen the events that took place throughout 2020. So, we need to take a long-term view for 2021, replacing the traditional predictions that people normally make at this time of year with likely trends, many of which have already begun to emerge.

The coming months will be characterised by an increased focus on operational resilience, a need to ensure the safety of employees and the suitability of their environment, and an acceleration of tech-enabled solutions that address the needs of a semi-remote workforce. The complicating factor in this picture is that we are likely to be living with low interest rates for some time to come. This restricts businesses’ ability to invest in these solutions.

Along with what may become the worst recession in living memory, reduced interest rates will drive financial services institutions to become more efficient, reduce silos and get smarter about how they deliver digital transformation. Investment budgets may be slashed, and the programs that go ahead will need to deliver rapid time to value. The organisations that accelerate their digital strategies are likely to be the businesses that will best recover in 2021, with an effective economic ‘bounce back’ being driven by those who can effectively harness powerful technology-enabled solutions. But with the pandemic continuing to perturb businesses as we begin the new year, how can they effectively do so?

The tech revolution has already begun

Digital transformation is not an unfamiliar phrase in financial services, but in 2020, it became more vital than ever. Traditionally, the finance industry has been a late adopter of new technologies. This is somewhat unsurprising, given the nature of the work, the constant threat of attackers looking to exploit any tech weaknesses, and increasing regulations.

For financial services organisations, finding the balance between tech innovation and regulatory and compliance obligations has been a challenge, with regulation coming out on top. However, as the current pandemic has shown, businesses need both flexibility and resilience to adapt to rapidly changing conditions, with the correct infrastructure underpinning the operational approach.

Many businesses have already implemented technological solutions, with over a third of financial services leaders across the globe having adopted an integrated system for workflow management across their business’ functions, according to recent research by ServiceNow. Yet, 95% of leaders in the finance industry admit to having workflows that take place either partially or completely offline, including document approvals like business contracts, security incident reports, IT asset requests and transactions such as salary or expense processing. Consequently, it is clear that while a tech revolution has already begun, there is still some way to go. 2021 will see the finance industry identify its technological weak points and begin to effectively harness the tools available in order to accelerate innovation and improve internal processes.

An increasingly adaptive workforce

We already knew that at some point over the course of the next decade, major changes in the financial services industry would make their mark on employees, forcing the workforce to become nimbler and more adaptive to quickly evolving technologies. The pandemic has accelerated this, bringing these considerations to the fore sooner than many organisations had anticipated.

Numerous employees in the finance industry may have used the same or similar processes throughout their careers, and in 2020 will have had to adapt to harnessing new technologies. Going forward, as machines automate more financial processes, employees will need to master other skills too. Learning fast and becoming adept at problem-solving and empathy will be vital. We will also see expectations shift within certain roles; customer service will no longer remain as just a front office responsibility, as middle and back office employees will also have a part to play.

Additionally, those with a background in commerce, data science and engineering will become more sought after in the industry, while training programmes will evolve to build up these specialised workers’ understanding of financial concepts. Financial institutions will increasingly find themselves competing for talent and will dedicate more time and money to reimagining the employee experience and creating an appealing company culture to attract and retain workers. It is important that this remains a priority in 2021 and that businesses do not push employee satisfaction to one side. Last year put a strain on most and there is no better time to look after those who have strived to keep the wheels turning.

Most financial services organisations should now have systems in place for encouraging communication between employees, ensuring that they feel supported when working remotely. A step beyond this would see silos broken down and workers feeling empowered to complete their work, no matter where their office might be.

This year will also likely see the return to the office, whether full-time or semi-remote, following the vaccine rollout. It is incredibly important that the finance industry pays close attention to implementing stringent safety measures, so that employees feel comfortable returning. Technology will again play a crucial role in this, but communication is key to ensuring the workforce is safe, productive and prepared to handle whatever might lie ahead.

More uncertainty ahead

Despite certain trends and patterns emerging in the finance industry, nobody can fully ascertain what will happen this year. But what we do know is that technological adoption will continue as organisations accelerate digital transformation and continually look to improve their working methods. And those that prioritise the most important part of their business – the people – will be best prepared to see a successful 2021.

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