The vast and constantly shifting ocean of financial tech (fintech) and all that it encompasses, has seen ripples and undercurrents become indomitable swells. This is especially true for the changes it has brought upon us recently.

As our understanding of the opportunities and challenges develop, I feel that a pragmatic approach offers us the best lens through which to view the movements and progression of the fintech sector.

When talking to customers in 2017, I noticed that conversations moved from technology-centric to solution-centric. I believe this is a result of a wider understanding of fintech and its practical implications. Focuses will include the businesses, technologies and methodologies it touches.

Meeting Customer Needs for Digital Transformation 

Customers need solutions that work well for them, meaning they must be simple to understand and can be delivered quickly. As financial services firms are now able to provide personalised and frictionless service – anytime, anywhere – via multiple channels, it will become the go-to flavour for 2018. This is other businesses are upping their game and creating new competitive advantages. On many levels, it shows real leadership and a permanent willingness to improve.

As is, there are signs that banks have started to move away from paper and analogue. They prefer to focus more on digital transformation. It’s the way forward for that sector. That’s all fine of course, but they need a robust digital architecture with slick and reliable processes for this to really take-off. This in and of itself is fascinating to me, as I think I first heard the term ‘going paperless’ in 1998.

If the aim is to get closer to what customers want and accelerate digital transformation, then success requires a new template, model or approach that supports rapid changes. Businesses need to bridge between traditional operations and agile innovations. To do so, they must centre themselves on the critical enabler of digital transformation – Data. Of course, it must come with all its diverse expressions.

Operations like form-filling and digital signature capturing are processes that allow banks to capture and analyse information faster. With technology, they suddenly could do more. This includes advanced analytics that enable them to improve the overall customer experience.

In many ways, Hitachi Vantara is providing these services as it focuses on digital outcomes. The platforms and services being offered are designed to help clients achieve cost-efficiencies and accelerate time-to-market deployment. On many levels, it pushed businesses to rethink their operations and processes, ensuring that their data is on-point and totally available. The end-goal, of course, is to increase customer loyalty and revenue growth.

Essentially, for businesses, analytics is empowering to them because, among other things, it directly transforms all sorts of inputs into competitive insights. Take for example video. With cameras now being placed everywhere, they work hand-in-hand with Internet of Things (IoT) sensors that are still being pushed out. Together, they are providing real-time intel to relevant stakeholders. However, all this raw data only offers most of this value when deep analysis are used. This is how businesses can define the right information points to make the right decision.

Exploring Possibilities with Developed AI

In 2017, I saw machine learning play a major role in creating personalised products. In 2018, I expect to see the rapid development of solutions based on artificial intelligence (AI). As is, the technology is still in its early stages; even so multiple AI use cases are showing better customer targeting and segmentation.  This includes automating processes, such as loan underwriting or chat-bots.

Such developments with AI have raised a few concerns, primarily among governance and protection. Both are key trends for the public sector and major business conglomerates. Indeed, customers are now willing to share more information to receive more personalised services. However, ensuring protection of this data is often very challenging as they are siloed and often unstructured.

To address this, many large financial institutions are now working on centralising information to gain a holistic view of their data and processes. As a result, access control is becoming tighter and more integrated. As a result, they will be more conducive in the coming months of 2018. Personally, when it comes to data protection, it’s always best to ‘get it done yesterday’. Right now, old-school data protection is officially disrupted. Indeed, one only has to think about the companies that have become massive headliners for all the wrong reasons to see why this change is necessary.

How is this relevant to fintech? As businesses and service providers consider these three pragmatic and methodological approaches, they will then properly be able to wrap their heads around the challenges facing this disruptive industry. That is the only way they can quickly get in step with this fast-changing environment.