Ten years ago, the 2008 financial crisis not only made headlines – it also signaled a fundamental shift in how the global banking system operates. Several regulations were put into effect to increase transparency and protect global markets
The financial services industry relies more on information technology than any other sector. That makes perfect sense given the high-speed and detail-oriented nature of the industry. Unfortunately, it’s costing a lot more to protect and maintain financial data these days.
Blockchain—a cryptographic, decentralized distributed ledger system—is gaining acceptance and prestige as its multiple advantages, such as immutability, become clear, even to normally cautious financial organisations. But it isn’t all smooth sailing. Especially in Europe, some of the new data and privacy regulations clash head-on with blockchain and its attendant crypto-currencies. Can the technology overcome these hurdles and continue on its path toward broad, industry-wide adoption?
Anyone working in banking knows that customer expectations are charging ahead at full throttle, fuelled by technology advances. Fortunately banks can use innovations such as AI and IoT to meet customers where they are at, and a recent Fujitsu report shows they are doing—or planning to do—just that. So what can we reasonably expect banking to become as a result of this transformative process?
What a huge advance it is that the financial sector now has robots to relieve the ever-growing pressure of regulation. Almost everyone handling or processing personal data now faces vastly increased compliance requirements once the European Union’s General Data Protection Regulation
For European banks, regulations (GDPR, MiFID II, PSD II, Open Banking) are aligning at a time when they are already warding off digital disruptors intent on wooing customers with convenient, cutting-edge technology-based offerings. Financial institutions that adopt a wait-and-see approach will likely lose ground in a rapidly changing financial landscape, but those who adapt and maximize their formidable advantages will prevail.
The last financial crisis demanded a response, and that response was regulation…and more regulation, to such an extent that financial institutions are scurrying to hire additional compliance staff to try to make sense of it all. Fortunately technology has come to the rescue once again by spawning regtech, which is evolving to better manage the formidable challenges created by regulatory change.
Millions of people work, shop and play online every day, leaving behind volumes of data that can include sensitive information. A study by IDC estimates that by 2020 there will be 5,200GB of data for every consumer on earth. In total, that works out at 40 zettabytes, or 57 times more than every grain of sand on every beach.
App developers are shooting ahead like missiles, struggling to outdo each other in the creativity department, and customers are loving them for it. But are banks keeping up, or have they been left out of the digital party, still struggling with outdated systems that simply “don’t do” technology all that well? 2017, characterized by the unexpected, is separating the serious contenders from the rest.
The European Commission’s General Data Protection Regulation (GDPR) comes into effect on May 25, 2018, and will regulate how businesses collect and process the personal data of all European Union (EU) residents.