The year 2020 has seen a dramatic shift towards all-digital platforms and services following the COVID-19 outbreak. Many businesses across the globe have accelerated their digital transformation strategies in order to maintain operations in a post-COVID environment.
By necessity and also by design, companies throughout the world have been adopting the latest technologies so that routine business activities can continue during nationwide lockdowns enforced by world governments throughout this year. Many more services have shifted completely online this year and are being supported by Fintech apps which are now an important part of the fast-growing digital financial services sector.
More than 400 compliance and risk professionals have provided key insights on the latest financial industry developments which have been released as part of the Thomson Reuters Regulatory Intelligence’s (TRRI) fifth annual survey report on Fintech, Regtech, and the role of compliance (in the financial sector).
The survey reveals that the adoption and implementation of technology have taken a major step forward during the Coronavirus crisis. These positive developments have come even though firms have faced major budget challenges. Fintech and Regtech sector growth are on track to accelerate in the coming years, even though there was a slowdown in the number of new initiatives being launched during these uncertain times.
Companies must be careful when introducing solutions and they must ensure that their products are meeting corporate governance standards or guidelines. A quarter or 25% of survey respondents stated that boards and risk and compliance functions should become more engaged or involved with Fintech platforms. However, many workers might not have received proper training or might not be qualified to work with the latest technologies.
More Global Systemically Important Financial Institutions (G-SIFIs) this year said they were “neutral,” (instead of “extremely or mostly positive”) when it comes to adopting the latest Fintech solutions. The survey didn’t look at the potential reasons for this shift, however, it might be that the COVID-19 crisis has restricted companies’ ability to invest in Fintech services. This could be why more businesses are simply using existing applications to save money.
As first reported by Reuters, Regtech apps continued to offer popular, embedded solutions for companies specializing in compliance monitoring, financial crime, AML/CTF, sanctions and regulatory reporting. Budgets for these technologies are expected to increase, with a combination of in-house and external software solutions being the most common option chosen by survey respondents.
Fintech offers many new opportunities for businesses as we head into 2021. The presence of Big Tech firms and the potential of AI and machine learning will enable companies to increase customer-focused services like financial inclusion.
Firms will have to overcome their budgetary limitations, acquire new technical skills, and update their IT infrastructure in order to benefit from the latest Fintech platforms. Firms must also ensure that they establish a proper corporate governance framework so that they can effectively manage the deployment of Fintech solutions.