Digital Transformation of the Financial Services in the age of COVID-19
Financial institution were always eager adopters of innovations in information technology (IT) which enabled them to improve efficiency and reduce risks. They were among the first buyers of the mainframe computers in the late 50s. From the 70s they utilize global telecommunications networks for trading and payments. They were quick to experiment with the internet and to introduce on-line banking.
However, breakneck speed of innovation during the last decade has left many financial institutions in a digital divide. Nimble FinTech companies which can quickly innovate and do not have cumbersome legacy IT systems on the back-end are chipping away lucrative business from traditional institutions. Abundance of cash in the world markets has made those FinTech companies attractive to investors and has enabled them to operate without significant income while they are trying to push out the incumbents. To complicate things further, BigTech companies are inching closer and closer to provision of financial services, which worries traditional financial institutions.
Against this background, the global COVID-19 pandemics has further accelerated digital transformation. Social distancing limitations have intensified the demand for end-to-end digitalized financial services and forced financial services providers and connected companies to reorganize their processes and to adapt to an almost full-remote work regime.
This session will examine the effects of the pandemics on financial services providers and other companies in the wider ecosystem, in relation to their digital transformation, including short-term effects but also potential long-term changes. Some of the topics that will be discussed are:
- Effects (both positive and negative) of COVID-19 on provision of financial services (FS) – incumbents and FinTechs.
- Which changes will revert to normal and which will become the new normal?
- Human resources management and potential changes in the age of wider acceptance of work from home (WfH).
- Opportunities and risks for local FS providers and companies in that ecosystem in relation to further digitalization and globalization of FS.
- Full digitalization of supply chains (government, FS providers, IT companies) – strengths, weaknesses, opportunities and threats.
- Innovation facilitators – how to balance the need for innovation, regulatory requirements and risk management.
- Cyber-risks arising from full (end-to-end) digitalization of FS and WfH arrangements.
- Influence of COVID-19 on further (and faster) adoption of cloud computing in the financial sector and related opportunities and risks.
- Influence of social distancing rules and recommendations on POS and ATM transactions and assessment of longer-term effects.
- Software development in the age of social distancing and WfH.
- Contact tracing requirements and technological enablers vs. data privacy concerns.