The International Data Corporation (IDC) forecasts global IT spend will exceed £2tn by 2020, and while PC, tablet and smartphone sales show signs of plateauing, the market’s 3.3 percent upward trajectory over the next four years will be sustained by the digital transformation found on third-party cloud and mobility platforms.
Healthcare will remain the fastest growing sector in the run-up to 2020 with a projected 5.7 percent rise in IT spending, followed by the banking, media and professional services sectors at 4.9 percent each. So where are the opportunities in each of these sectors? Where do their technological challenges lie? And, what technology-specific solutions will each sector look for as 2020 looms large on the horizon?
Sector Trends – Banking
“Technology continues to shake-up the banking industry. Social, mobile, analytics, cloud and the Internet of Things present both disruption (think payment providers PayPal and Google Wallet) and opportunity (think collaboration and wearable devices that enable fast, self-serve employee interactions and training),” – Accenture Technology Vision for Banking 2015
Banks have so far caught the wave of technology, albeit with an old-fashioned surfboard. Their digital transformation is set to continue as they morph their operations to place their technology at the nucleus of an interlinked network of various industry providers and services that constantly and instantly pivots around to meet their customers’ everyday needs.
Research done by KMPG and UBS found that mobile is already the largest banking channel by volume of transactions and it has entered a rapid-adoption phase with new customers. KMPG suggest that in order for banks to survive and thrive in this new mobile world they’ll need to:
- Find ways to make their service personalised, for example virtual customer support that is bespoke rather than sales-focussed.
- Invest in wearables and augmented reality.
- Overcome considerable infrastructure challenges and meet their customers’ desire for ease-of-use with greater security.
1. Internet of Me – personalised banking
Extremely personalised experiences using technology that collects highly contextualised data that is able to deliver customisation everywhere. These experiences could be enhanced by spending/saving psychology, behavioural science, location data and other services. For example, customers can be notified after purchasing a Friday night pizza that they are very close to a budget overspend, or be prompted to impulse save when their spending falls below average. More than half of bank executives polled confirm they are using or researching wearables, as opposed to only 31 percent of insurance executives, and 63 percent in the banking sector expect wearables to be broadly adopted across the industry in the immediate future.
2. Outcome Economy – device driven banking solutions
Russia’s Alfa-Bank launched an activity-based savings account where customers’ accounts were linked with wearable activity tracking devices. The customer then assigned a cash value to every meter walked and this money was automatically moved into a special savings account that earned a higher interest. The result was customers saving twice as much and walking 1.5 times as far; both healthy and positive outcomes.
Meanwhile Visa is exploring an in-car ordering service with Pizza Hut that will allow customers to order a pizza without using their phone, laptop or even their hands, a service that would likely extend to many other areas. These examples show how banks are finding ways to use intelligent devices to make their customers’ lives easier and even solve their problems.
3. Platform (R)evolution – defining ecosystems, redefining banking
This allows banks to create new ways to become familiar with their customers through Application programing interface (API) technology. They can then open their platforms up to allow more partners to bring the customer a wider range of services and products.
4. Intelligent Enterprise – Smarter, more efficient banking
Banks are not new to using software algorithms to help their employees and customers make faster decisions, and the advent of cognitive computing (which is infused with data and cloud processing power) will only make this practice smarter. In fact, banks across the world are already using AI to predict customers’ life changes and automate then enhance internal business processes to ensure maximum productivity. This will enable banks to transform the way that they use data, and solve problems that were previously difficult or impossible to resolve.
5. Workforce Reimagined – Bank employees collaborating with machines
In the new workplace both staff and machines collaborate and this interaction is becoming easier and more natural, resulting in new kind of ‘teamwork’. Wearable technology is also helping workers to assimilate technology more effortlessly into their workflows. Several evolving digital technologies are of particular interest to the banking sector, including technologies that allow employees to do the work that previously only IT technicians could do, software automation, sensors to collect more intelligent data about their environments, crowdsourcing talent and skills from outside their organisations, and robotics to systematise business processes.
The bottom line?
Banks need to adopt new technology for a number of reasons not least of which is the fact that their customers demand convenience. The old fashioned and rather creakingly slow ways in which banks have traditionally operated has already allowed other providers to step up in their place (think PayPal), and so banks must act quickly if they don’t want to lose more of a grip on their own market. In addition, adopting new technologies won’t only save time but also money for both institutions and their customers.