Losses are inevitable in banking, but minimizing them is a top goal of any bank. What can be learned from recent losses suffered from financial dealings with two companies, Archegos Capital and Greensill Capital, to steer clear of similar avoidable blows in the future? Shadow banking and transparency are two areas to consider seriously.
In the banking industry, there is little question that COVID-19 forced digital adoption at an unparalleled rate. Years-long timelines for preplanned digital transformations were suddenly condensed into a matter of months — as “shelter in place” mandates forced consumers across the globe to move their financial activities online.
The concept of universal basic income has received support from many proponents over the years, who argue that it will pay for itself in the long run through a happy, stress-free and productive population able to achieve employment goals while liberated from the constant worries of meeting day-to-day-bills obligations. Trial runs have bolstered this argument, and support is growing—but UBI is a long way off from being unanimously accepted.
Artificial intelligence’s foothold in our personal lives is growing, but many of us draw the line at our personal finances and investments. That may soon change; the future of the financial-services industry seems intertwined with autonomous finance, which promises to free customers from the mundane tasks related to managing their financial affairs. The technology needed to automate financial management is in place, but will consumers hand over the reins?
Millions of existing and potential bank customers spend a significant amount of time on social-media platforms, and banks, like other businesses, are meeting them there to interact and improve their product and service offerings. The number of banks with plans to exploit this opportunity to engage with customers is increasing, which is understandable as social media offers firms the chance to gain a granular understanding of who their customers are.
The UK has long been regarded as one of the most regulated countries in the world when it comes to the financial services sector. Arguably much of this has been driven by membership of the EU, and the numerous money laundering directives we’ve adhered to over recent years. However, the UK will still be one of, if not the most strictly regulated countries even after Brexit – as the City of London needs to continue to be seen as beyond reproach as a financial institution.
In today’s investment environment, sustainability objectives are regarded as highly as other important goals. European Union regulators recently implemented the Sustainable Finance Disclosure Regulation, which seeks to ensure that financial firms are honest about how sustainable their products and services are. What are the key steps financial institutions should be taking to ensure that their disclosure reporting aligns with regulatory requirements while anticipating the new demands on their capital providers?
With useful data and information piling up in the financial realm, firms can use all the help they can get to more efficiently compile and employ it. Automation, which manifests itself in many forms, is a must for financial institutions. Natural language processing translates words into useful tools and applications that enable financial companies to be more compliant, profitable and sustainable and is experiencing increasing adoption in the financial industry.
We are witnessing an evolution. Banking is changing in so many ways – the move away from cash, and even cards, the urgent uptake of online banking, and a growing interest in personal investing. The slow and steady pace of the industry has been accelerated more in the last year than in the entire decade prior.
The investment world is never free of a popular new kid on the block; special purpose acquisition companies are attracting significant investor interest as they help companies transition from private to public. Will these shell companies go down in investment history as another short-term craze, or will they become a permanent part of the IPO process? The jury is undecided, but the SPAC is an avenue that investors should consider.