Banks are currently having to manage not only macro-economic and geopolitical change, but also profound, longer-lasting shifts that are driven by technological innovation, finds a recent report from Accenture.
“We believe these shifts are an opportunity for banks to reimagine and reposition themselves for the future,” Accenture states in the report. “They are reshaping industries, breaking down barriers to entry, and blurring industry lines.”
Following the financial crisis of 2008-09, “the fintech universe exploded,” according to the report, titled “Top 10 [Banking] Trends for 2023: The gravity of rising rates.”
“A multitude of brilliant innovators with sky-high valuations burst onto the scene, awash with cheap capital and prioritizing scale over financial returns,” reads the report. “Ignoring time-honoured business models, they targeted only particular parts of the value chain; the result was an eruption of innovation and competition.”
Today, similarly powerful “Forces of change” are reshaping banking, Accenture posits.
“The last time the banking industry experienced steeply rising rates off a very low base was back in 2005—before the launch of the iPhone, which seems like an eon ago,” the report notes.
Accenture’s trends report identifies the following five fintech forces of change for 2023 and beyond.
Fintechs can create stronger workforces using a three-pronged strategy, according to the report, as demonstrated by today’s Canadian industry leaders.
Accenture says this multifaceted approach combines accessing talent inside and outside the organization by unlocking the potential of existing talent with technology and through developing their skills, as well as creating new talent “by looking at people’s potential beyond their current skills.”
Talent will make ever-increasing demands on leadership in the months and years ahead, the report warns, but “if it isn’t given the priority it deserves, it will quickly assert itself as a burning platform.”
Companies are making the strategic decision to continuously reinvent themselves by digitally transforming every part of their business with technology, data, automation, and AI.
“They are breaking down internal silos and connecting functions and data across the value chain—creating new ways of operating and serving customers and people, and discovering new business models and growth opportunities,” reads the report.
With this strategy, fintechs “can set a new performance frontier for themselves—and for the industry.”
Web3 and crypto is a fast-evolving spectrum of digitally-enhanced worlds, realities, and business models— “stretching from a digital layer on reality to completely virtual environments that offers every enterprise opportunities for change and growth,” according to Accenture.
“Just as mobile did, so the metaverse is opening a new world of possibilities,” the report states, going so far as to argue that “the metaverse may be our best opportunity to put humanity back into banking.”
The report recommends that fintechs “start to create a strategy now to realize the business potential of the metaverse continuum tomorrow.”
New technologies and expanding IT are disrupting all aspects of business, “driving the next waves of innovation that are bringing new approaches and solutions to businesses in every industry,” the report reads.
The pandemic and the accompanying work-from-home upheaval further accelerated the technological transformation that was already underway in Canada’s banking sector, for example. It is now more important than ever to harness new forms of technology “for competitive advantage.”
Adopting the latest technologies across business-critical areas helps fintechs and other companies adapt to the new normal of hybrid working, which demands engaging and productive digital work environments for distributed teams that may expect to be able to perform from anywhere at anytime.
Sustainability spans environmental, social, and governance issues—from transitioning to
a zero-carbon economy to broader human rights concerns.
“When companies and governments embed sustainability into their operations, they can create real value and make a difference,” the report suggests.