Predictions for Fintech: Balancing hype with realism in 2018 Viewing exciting advances through the lens of pure pragmatism

Predictions for Fintech: Balancing hype with realism in 2018
Viewing exciting advances through the lens of pure pragmatism

By Genady Chabranov, Director, Financial Technology Innovation at Hitachi Vantara

The vast and constantly shifting ocean of Fintech, and all that it encompasses, has seen ripples and undercurrents become indomitable swells in terms of the changes it has brought upon us recently.

As our understanding of the opportunities and challenged develops, I feel that a pragmatic approach offers us the best lens through which to view the movements and progression of the Fintech sector.

When talking to customers in 2017, I’ve noticed that conversations have moved from technology-centric to solution-centric. I believe this is a result of a wider understanding of Fintech and its practical implications, as well as the businesses, technologies and methodologies it touches. In this blog post I will outline some of those conversations and the way I expect them to impact the sector in 2018.

Meet customer needs in digital transformation

Customers need solutions which work well for them, that are simple to understand, and which are delivered quickly. The ability of Financial Services firms to provide personalized and frictionless service - anytime, anywhere - via multiple channels is going to be flavor of the year in 2018; this is exactly how we build in competitive advantage, show real leadership, and a permanent willingness to improve.

We are seeing banks move away from paper and analogue, and focusing increasingly on digital transformation. That’s all fine of course, but they need a robust digital architecture with slick and reliable processes for this to actually happen. This in and of itself is fascinating to me, as I think I first heard the term ‘go paperless’ in 1998…

If the aim is to get closer to what customers want and accelerate digital transformation, then success requires a new template, model or approach that supports rapid change. We can bridge between traditional operations and agile innovation by centering ourselves on the critical enabler of digital transformation – Data - in all of its diverse expressions.

Operations like form filling and digital signature capturing allow banks to capture and analyze information faster and use advanced analytics to improve the overall customer experience.

Hitachi Vantara focuses on digital outcomes. We want our customers to achieve cost efficiency and accelerate time-to-market by rethinking operations and processes and ensuring that their data is on point and totally at available. What happens when we do this? For the client it means increased customer loyalty and revenue growth through improved customer experiences that are based on analytics and insights.

Analytics is especially interesting because, among other things, it directly transforms video data into competitive insights. Cameras are everywhere these days and have now become Internet of Things (IoT) sensors which can provide real-time intel. But to make the most of this value, organizations need an analytics solution. 

Exploring the possibilities of developed AI

In 2017, we saw machine learning playing a major role in creating personalized products, and in 2018 I expect to see the rapid development of solutions based on artificial intelligence.

Although the technology is still in its early stages, we are already seeing multiple AI use cases, for example better customer targeting and segmentation or the automation of processes such as loan underwriting or chat bots.

AI has also been a focus for Hitachi Vantara. Our customers benefit from 107 years of experience in operational tech and 58 years in IT that we combine in the smart IoT platform we call Lumada. Advanced analytics and machine learning are packaged into solution cores to solve business problems and help companies embrace the benefits of real-time optimization and AI.

Pentaho, a Hitachi Group Company, announced earlier this year it had created orchestration capabilities that streamline the entire machine learning workflow and enable teams of data scientists, engineers and analysts to train, tune, test and deploy predictive models. Pentaho's Data Integration and Analytics platform ends the 'gridlock' associated with machine learning by enabling smooth team collaboration, maximizing limited data science resources and putting predictive models to work on big data faster - regardless of use case, industry or language. So just think of the AI possibilities this could bring to Fintech in 2018!

Protection and Governance become paramount

Data governance and protection will be another key trend. Customers are now willing to share more information to receive more personalized services. However, ensuring protection of this data is often very challenging, since it is siloed and often unstructured.

Many large financial institutions are now working on centralizing information to gain a holistic view of their data and processes. As a result, access control is becoming much tighter, and will become even more so in 2018.

Companies need to focus on meeting governance and regulatory compliance rules - and gaining absolute control of corporate data organization-wide. These solutions securely automate discovery, extraction, classification, enrichment and categorization across any data landscape. The aim is streamlined compliance, again with customer-centricity at its heart.

When it comes to Data Protection, my approach is “get it done yesterday”. Old-school data protection has officially been disrupted – and one only has to think about the companies who have become massive news stories for all the wrong reasons to see why.

To become truly secure, companies need to focus on orchestrating backup, business continuity and disaster recovery within business-defined workflows. Hitachi works to simplify all of our client’s recovery challenges via a single unified platform; cutting cost, complexity and risk to meet the service-level requirements with advanced data management and protection techniques.

With these three pragmatic and methodological approaches, we can begin to get our heads around the challenges facing the Fintech industry - both now and in the future. We can also put a brave foot forward, and hopefully soon walk quickly in step with a fast-changing environment.

And therein lies the opportunity.

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