After the announcement in January from the Malta Financial Services Authority, stating the significant pending changes to Maltese pension regulations, both companies and advisers alike felt the net tighten around their daily practices.
“The times they are a-Changin’” sung Bob Dylan in the 1960’s as the civil rights movement swept through the US and changed the direction of a Nation forever.Fast forward to 2019 and this anthem of change rings true for the banking sector. Whether it be emerging FinTech start-ups, regulatory bodies or the changing demands of their customers, it’s an industry that is being disrupted from all sides.
It’s now been nearly a year since the General Data Protection Regulation (GDPR) came into effect across the European Union, bringing with it panic, misinformation and scores of emails asking us to consent to stay on mailing lists we’d forgotten we’d signed up to.
There has been a rapid increase in the size and number of investments into UK fintechs with the likes of Monzo and Revolut leading the charge. Interestingly, it is not just the VC funds driving this; banks are also investing or in many cases, acquiring fintech companies outright.
Although the GDPR—designed to augment consumers’ data protection and privacy—is the brainchild of the Council of the European Union and European Parliament, its reach extends far beyond Europe. In the United States, it is no longer a choice but a must for financial firms to adopt stricter consumer-data-protection measures. The costs of not doing so far outweigh the costs of compliance; regulators expect data security, and so do customers.
Brexit looms large over all aspects of the UK’s banking sector, including hiring plans. Continued uncertainty about what direction the UK/EU divorce proceedings will go (if they go at all) has organisations on edge, but that didn’t stop them from hiring last year, research shows. Retaining existing top-notch talent was a priority, but attracting new, highly skilled professionals was also a common goal, with UK banks topping the hiring charts.
If it feels as if artificial intelligence is taking over, there’s a reason for it. It is. The democratization of AI has begun, and the technology is set to change the world as we once knew it. Banks won’t be left out of the transformation. While bank senior executives cheer the cost-saving and efficiency-boosting potential of AI, bank employees may fear for their jobs. But that’s where reskilling steps in
Open banking is an emerging global trend and is expected to drive increased choice for how individuals and businesses consume financial services, is driving significant change as the financial services industry adjusts to a digitally-enabled economy, and is working to appropriately manage the risk of a new digital ecosystem.
Successful banks know who the boss is: the customer. And today’s customers, especially those who fall into the Millennial category, demand fast, error-free service delivered seamlessly. Banks confronted by the formidable challenge of adapting to both regulation and technology are also finding that up-and-coming fintechs are adept at meeting the demands of bank clients. Banks, more than they ever have before, must listen closely to their customers.
The United States has reached a critical point in determining data privacy standards. With mounting concern among all stakeholders, it is no longer a question of whether more privacy laws will be enacted, but how—and specifically, whether the problem will be resolved at the state or national level.