The 2019 World Economic Forum in Davos, Switzerland offered a melting pot of discussions around the most critical economic, social, and political issues faced by the world. The three-day event saw more than 3,000 global leaders, innovators, inspirational figures, business minds, and academics ideate, discuss, and deliberate.
As a strategic partner of the World Economic Forum (WEF) for over a decade, HCL Technologies had been working in tandem with the forum to highlight some of the global challenges and opportunities of our times. This year is special as HCL, in association with Fast Company, is hosted a three-day event at a dedicated pavilion on the sidelines of WEF’s annual meeting to showcase thought leadership programs, technological innovations, and the various new solutions.
These programs aimed is to shed light on HCL’s vision of human intervention in technology. The second day of the event saw a panel discussion titled, ‘Disruptive Innovation: Banking 2030’. The discussion explored how the regulatory trends, cybersecurity, and influx of data are driving innovations in the finserv industry. The panel comprised Ann Cairns, Vice Chairman, MasterCard; Laurent Le Moal, CEO PayU; and Hikmet Ersek, President, CEO, and Director, Western Union. The discussion was hosted by Rahul Singh, President, Financial Services, HCL Technologies and was anchored by Stephanie Mehta, Editor-in-Chief, Fast Company.
What does the future of banking look like? Find out here as experts discuss topics ranging from the biggest drivers of change to disrupting consumer trust and democratizing financial services in emerging markets.
The panel covered topics ranging from the biggest drivers of change to disrupting consumer trust and democratizing financial services in emerging markets. Here are the key takeaways from the panel discussion:
Biggest Drivers of Change in 2030
As digitalization gathered steam, institutions around the world have already rolled out tokenization. Contactless transactions are taking off in a big way and is being swiftly introduced to cross mass transit systems. Internet of things (IoT) is driving seamless payment processes and artificial intelligence (AI) and chatbots will be key to detection of codes around the world. Intelligent computing will augment the creativity of the skilled workforce. Empowerment of consumers via mobile devices is going to be a key focus over the next few years. With payments becoming truly invisible, the role of fintech startups will not be limited to disrupting the big players, but to penetrate tier II and tier III markets. The data exchange platform is miniscule at the moment, but big investments are going to be made in this space in order to crystalize data and optimize its potential. Combining the tech innovations will drive growth over the next decade, especially in emerging markets. While traditional banks may outsource many of their operations, one thing that will remain integral to their fortunes is customer relationship.
Strengthening Consumer Trust
Trust is fragile, and hence, central to every business strategy. As a result, privacy and data protection is growing in importance in a highly-digitalized landscape. This makes cybersecurity a critical element in the digital spectrum. Customers trust has to be revitalized by robust cybersecurity. This is especially true in case of mobile apps which are widely used in transferring money. Huge investments are being made in cybersecurity initiatives to keep bad money and malpractices at bay. AI detects transaction patterns of customers, while the biometric technology is used to identify the right sender and recipient to eliminate data breaches. Digital banking has great potential for financial institutions to win consumer trust. It offers services in areas that big banks lack though they have the requisite data. There should be offers and products suitable to a global consumer. If need be, there should be a change in the business model as well. Partnerships can be forged between players and currency conversion must be made a free service.
Democratization of Financial Services in Emerging Markets
The focus should be on financial inclusion and to bring more and more people into the financial ecosystem. Instead of dealing directly with consumers, this can be done by partnering with big companies, banks, and even governments. What has been achieved in India with UPI is a fascinating case in point. It provides a level playing field and eliminates merchant interchanges. Almost 1 billion people have been brought into the digital banking spectrum. This has seen a proliferation of consumer payments platform. In emerging markets, people should be able to get small loans, which can lead to bigger loans. Digital technologies can become the biggest enabler here. Small and medium-sized enterprises should have access to underserved markets to democratize financial services.
Data to Take Businesses to the Next Level
Data can help governments understand consumption patterns. Real-time data can provide better insight than government statistics. Big Data can help in developing robust business models and government policies. Similarly, it can be used to strengthen anti-money laundering initiatives. AI is used to mine huge amount of data that is generated daily to track the shifting behavioral patterns of the customers. A lot of acquisitions are happening in the AI space in the fintech sector because AI can use behavioral data to protect consumers.
Impact of cryptocurrency
A lot of finserv organizations are investing in cryptocurrency because of its future potential. There are ongoing talks about stable coins and this can actually redefine the idea of monetary transactions. In banking, most transactions are done through trading, which is driven by volatility. So, cryptocurrency can be a good option for trading. In such a scenario, cryptocurrency exchanges need recognition and trust. Banks and traditional financial institutions can instill that kind of confidence among investors for them to embrace cryptocurrency for good.
If you wish to know more about our Davos dialogues, check out #FCDavosDialogues and #HCLatDavos