The Certainty of Uncertainty: Questions for the Financial Services industry to ponder in 2021
The certainty of uncertainty
If 2020 taught us anything it is that the only certainty is uncertainty itself. It was an extraordinary year where what we assumed would happen, didn’t. Predictions turned out to be futile. No one saw that coming.
We’re not saying that one shouldn’t make assessments and plan for what the future might hold. But there is a difference between predicting what specific events will happen and coming up with a few guiding thoughts that might be useful during the coming 12 months. The former is didactic and narrow. The latter, sympathetic and open-minded.
A little light on the horizon
The feeling we have right now is that 2021 is filled with promise. After what we all endured last year, global momentum and mood seem to be largely positive, with the second half of the year, especially, laden with the potential for the world to return to a variant of pre-COVID normality. And this normality should boost confidence and growth.
But those promised lands feel distant at present. As we put this piece together, each of the UK’s devolved nations is in some form of COVID-enforced lockdown and political division seems to be only deepening in the US. A happy new year it is not, and whilst the horizon may look a little brighter, there is a way to go before we get there.
Even then however, it is clear that the world that we will return to is not the one we left. Too much has altered, too much has evolved and that is certainly true of the wider Financial Services industry.
An upturn for financial services
Looking to the long term, 2021 remains full of promise for many reasons. As Mark Curtis said when introducing Fjord Trends 2021: “Throughout history, after a global crisis, a new era of thinking begins.” And it’s with that spirit of adventure and curiosity that we move into 2021, both as a company and in how we’re thinking about helping clients in financial services.
Our partners within Accenture have gone one step futher and dug into the detail of last year within the banking industry and explored some of the key trends that will affect the banking industry, and the key questions that the industry should be asking of itself as it enters a period of disruption, transition and soul-searching.
Once vaccinations are in wider circulation and COVID has calmed, a period of growth in financial services should return. Organisations must position themselves for when this time comes. They mustn’t get left behind during times that will inevitably be filled with rapid change.
A few thoughts to ponder
This is, of course, an overly simplified view. The truth is much more nuanced. While some parts of the path ahead do indeed look more certain than others and, whilst we don’t try to predict the future, we have spent a little time thinking about a few themes that financial services should be mindful of over the coming months.
- Through 2021 and beyond, it’s likely that workforces in financial services will remain, for the most part, disparate and remote. Through necessity, we’ve learned that productivity can remain high without staff having to physically gather on a daily basis. But as this trend becomes more entrenched, the need for security will be higher than ever. All organisations must evolve their security solutions to suit how employees now regularly work on high-value tasks from kitchens and bedrooms. Without keeping it up to date, it’s only a matter of time before serious security breaches bring growth to a halt.
- Building on this theme, the customer-facing banking landscape looks to have changed forever too, with branch closures set to be a feature of the coming 12 months. Financial services organisations, especially more traditional firms who have attempted to stave off a full shift to technological solutions, will need to come up with innovative ways of servicing all customers – whoever they are, whatever their age, and regardless of their tech proficiency – via platforms, APS’s, apps and other digital and hybrid touchpoints. Organisations that adapt will thrive.
- As more banking customers use technology, the trend towards data in financial services will only grow too. COVID-19 has added weight to the wave of data in financial services and the number of use cases for data is exploding. In a post-COVID world, organisations who have readied themselves for the data revolution will be well set to profit, whilst those who have stuck their heads in the sand will fall behind.
- The journey towards AI-enablement should be considered now more than ever. As traditional revenue streams creak under the strain of zero or possibly even negative interest rates and with many banks under enormous pressure to increase lending to aid post-COVID growth AI can help maximise the most out of current business models while simultaneously offering a pathway to new ones and the new revenue streams that they bring.
A lot on the line
If 2020 was a paradigm shift year, 2021 will be the pivot or inflection point for many organisations and even entire industries to enter the new or the never to be seen ahead.
There is a lot resting on 2021’s shoulders and only time will tell if it lives up to expectations.