Changes Impacting the Financial Sector That All Managers Need to Know
Disruption is coming in the financial sector much like it has in other areas of the economy. They include a host of technology innovations, including artificial intelligence, advanced analytics, blockchain, online financial services and fraud detection. Knowing how to embrace these disruptive technologies and manage how they are integrated into business operations is going to make employees and job candidates stand out in the finance industry. It’s good to be prepared for changes impacting the financial sector.
Certainly, those who earn an MBA in Finance, which combines expertise in business strategy and the details of finance, will learn about these innovative technologies and how they can be used to make financial services more efficient and effective.
Here are five changes that will play a significant role in the future of finance.
Blockchain technology, mostly associated with cryptocurrency, has uses far beyond that industry. The technology allows for creation of a secure digital ledger that is accessible from a network of computers. Once changed, entries in the ledger cannot be changed. It provides a secure, reliable log of transactions. According to PWC Global, “The use of the blockchain “public ledger” will go on to become an integral part of financial institutions’ technology and operational infrastructure.”
PWC also believes that artificial intelligence (AI) will enter the financial world in a big way. They predict this will go far beyond “replacing the bank teller.” Robotics and AI will allow financial service companies, including banks, to both reduce costs and better mitigate risks. Engineers are trying to develop AI systems that combine social and emotional intelligence, natural language processing, logic and self-supervised learning, among many other areas. All this can create programs that are better able to serve customers.
Machine learning and AI also will play a key role in creating data analytics programs that can extract actionable information from enormous datasets. This is going to come into play for the financial industry in a number of ways. Sophisticated software programs already are used to crunch data on market transactions to make predictions on where the market is going. But data can also help financial service companies offer products based on a client’s past transaction history and areas of interest. It could even be used to establish the best location for a new bank branch.
Online Financial Services
For customers at financial service companies, this will mean allowing customers more access to online-based platforms for transferring money (for example). Internally, this will mean financial companies and departments can move many of their operations onto the cloud. Information Age calls the emergence of these services “one of the bigger impacts on the industry.”
Cybersecurity is an issue with every industry. It’s particularly of concern in finance, where sensitive financial information for both individuals and organizations is handled. Finding and employing the best cyber security software available – something that is continually changing – is a priority for those who work in management positions in finance.
These are five of the issues that are disrupting the financial industry. All are areas that graduates from an MBA in Finance program will deal with eventually. Innovative technology is here to stay. Now, it’s a matter of developing the expertise needed to properly leverage that technology to achieve success.
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