It is no secret that 2020 has been a year of intense confusion, every facet of the modern world has had to adapt and persevere wherever they can. In the unprecedented times this year has offered us, it can be a wonder how fintech may be performing and what might be in store for the sector. What can we tell about the future amidst the uncertainty?
Firstly, and most noticeably, it is remarkable how quickly the financial sector has adapted to working from home. Despite the adjustment it may need to be away from the office and colleagues, the work is getting done and projects are moving forward. Clients are even showing increased activity of late. This momentum is a promising sign for the prospects of office free working.
Some of the key concerns with the swap to agile working are in terms of cyber-security. Home broadband is less secure than an office network and offers less connectivity. This however has prompted outsourcing of front and middle office to third parties; providers with more resilient to crises. Robust models and well oiled continuity plans allow third party firms to prevent service levels decreasing and maintain security. Outsourcing of this regard will likely see a further spike as it has shown that this collaborative model is resilient to Covid-19.
Businesses are also now keen to shift spending and development away from niche, high cost best of breed systems. In fact contrary to this, more and more companies are opting
to offer their clients more extensive and interactive data and information online. As stated by Funds Europe in an article dated June 2020, this will provide better market access,
reliable exposures to counterparties and enhanced liquidity.
A more efficient fintech environment is already becoming a priority and the coming year will likely see the product of this. Also reducing costs is a trend here to stay, but focus is shifting towards more automation of existing processes and use of artificial intelligence, making labour repeatable processes obsolete. On top of this, the new normality of agile working demands higher security for IT systems.
With this in mind it is logical to say that throughout 2021, increasing efficiency of existing platforms and decreasing costs where possible will be focusses for the sector. Also outsourcing will see an increase and likely become the norm. This means that the aim of the game is to know when outside help might be needed and ensure you hone and perfect your current platform with minimal expansion.