At the Milken Institute Global Conference 2016, with the event’s theme being The Future of Humankind, I noticed that the revolution and disturbance of FinTech in the traditional financial industry was a popular issue to discuss. One program invited several panelists who view the impact of FinTech from different angles. Through this discussion, some trends and issues surfaced:
The Inevitable Change
With the improvement of technology, humankind is able to achieve certain activities previous generations never imagined we can achieve, such as accessing any information we want as long as we have smart phones connected to internet anytime and anywhere. As public habits and thoughts change, it is natural that people will adopt different methods to consume and shift their standards and demands for the financial service.
Some people call the above a disruption or disturbance of the financial industry, but I consider the neutral word ‘change’ more appropriate to describe the trend. After all, the only thing in the world that never changes is change itself. Traditional banks and FinTech startups have a mutually beneficial relationship, and they need to collaborate hand in hand in order to revolt against inefficiencies.
Some technical skills in the financial industry would gradually be sourced out to machines. For example, low-end analysis and spreadsheet duty. One panelist claimed that the financial analyst is the most over-paid position in the financial industry considering the existing novel technology. It is interesting to see the arguments emerging from the manufacturing industry spread to the financial industry. What we can be certain of is that some jobs performed manually will definitely be replaced by cheaper, faster, and more automatic machine power. The role of humans is to be key decision makers who decide the priority of all the settings.
If the “disruption” or “disturbance” of FinTech is inevitable, the shift of workforce will be predictable. Take shared economy for instance. Once everybody has a smart phone and can access internet 24/7, what would stop people from using Uber or Lyft and come back to Taxis? If the number of people who use Taxis decreases gradually, what would stop the workforce flowing to the new service? Therefore, identifying what functions and positions would be hard to replace by computers is crucial to those going to devote their time to the financial industry in the next decade.
Different Viewpoints of Decision Makers
Business decision makers usually have to make decisions with insufficient information, leading to inferior decision quality or false decisions. Machine intelligence will allow decision makers to access timely and considerable information, capturing the timing to react to the customers or fix the service and products. Loyal customers will enjoy the highly satisfactory experience, enforcing the brand value and, at the same time, creating additional value proposition toward customers.
This change is also a good opportunity for enterprises to differentiate themselves. The machine learning, cloud computing, and Internet of Things not only make people see “What” but also dissect the nature of “How” and “Why”.