What are the Most Disruptive Trends in the Financial Services Right Now?


Posted on: Mar 23, 2016 by Olaf Badstubner

The banking sector is evolving at unprecedented speed. There are a number of different factors at play. Firstly, the rapid development of new technologies such as Cloud Computing, the Internet of Things, and Big Data, all factors which are pushing us into a hyper-connected world, moving at real-time speed.

Secondly, customer behaviours are also changing. We now expect a 24/7 service, being able to engage and interact with our financial service providers whenever and from wherever we want.

Finally, as the frontiers of traditional financial services blur with the latest digital services, new competitors are emerging. Every player that has access to the customer globally has the potential power to take on the established banks. Apple, Google, as well as many FinTech start-ups and even some telecom organizations, have the ambition to disrupt the existing banking landscape. Indeed, in the US alone, around 18 per cent of the population now use mobile payments regularly – suggesting that telecom organisations could soon become a force to be reckoned with in the FS industry.

Apple and Google are leading the list of the biggest companies by market capitalization. As recently as the 29th February Apple’s market cap stood at $536bn while Google’s had hit $494bn. The first financial institute does not appear until on that list until 10th, where Wells Fargo leads the industry with a $239bn cap. Next is JP Morgan Chase at 15th, a market cap of $207bn. Both are less half the size of the leading companies.

Let's be clear: this is just the beginning. Early stage technologies, such as crypto-currencies, Blockchain and new business models like peer-to-peer lending are also threatening to disrupt existing practices. Ably demonstrating the shift in priority – we see the announcement that Anshu Jain, the former Co-CEO of Deutsche Bank, has now joined SoFi, a Silicon Valley FinTech founded in 2011 and specializing in online lending.

New regulations further increase the pressure on the sector, threatening local players that may not have the means to handle complex international regulations.

All this promises to profoundly change the finance landscape in the years to come.

Primed for Success

Interestingly, although they may seem to be on the back foot, traditional banks are in a good position. By managing transactions and monetary flux, banks are very well placed at the heart of the digital world. Those who will prosper will be the organizations that keep their finger on the real-time pulse of the digital economy, using their vast and existing knowledge to revolutionize the industry.

From improving the customer experience through personalized, real-time recommendations; increasing operational excellence with predictive asset management; or inventing new business models with the Economy of data, the opportunity is there.

And while this brings a number of new risks it also offers a huge business opportunity for those who are forward-thinking and agile enough to seize it.

It's a major tectonic shift, and we can expect issues of trust and compliance to remain at the centre of the sector. Just like having the right security approach is not an option, being compliant is no longer negotiable. However, it is the financial institutions’ choices in their approach to this area that will determine those who survive or disappear. My prediction is a fundamental consolidation of the financial services industry within the next decade.

Read more about the trust and compliance challenges currently facing the Financial Service sector, and how a digital-first approach to cyber-security could be the answer.

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About Olaf Badstubner

Global Director Financial Services
As Global Director Financial Services at Atos, Olaf is heading the strategic go-to-market of Risk, Compliance and Regulatory Reporting. He is a deeply accomplished and agile market strategy & business development executive with strong international management experience and a proven track record in banking for almost 20 years. Prior to Atos he served as Director at Siemens with responsibility of financial services clients. He also served as Management Consultant at Siemens with strong focus on banks. Olaf is a graduated engineer (Dipl.-Ing.) in Information Technology of Ilmenau University of Technology and started his career at a German bank in 1996

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