Covid-19 has accelerated the adoption of digital transformation due to the need to conduct more business remotely through digital channels. Accelerating digital change has been observed throughout wholesale business banking and related activities such as cash management, trade finance, and working capital solutions. Consumers have responded by showing more confidence in the new technology, e.g., in the payments sphere, cashless payments have decreased.
A recent report analyses how Covid-19 and technology are changing financial institutions. These innovations have affected different sectors of financial markets, from crypto-assets as a new asset class, large technology companies entering the financial services market, and a change in the traditional working model.
The paper explains the trends in the sector and the changes that are taking place. These include wealth advisors, who are key partners of asset managers. This section mentions BETTER FINANCE's research papers on robo-advice, which has been a fintech disruptor for the market. As indicated by BETTER FINANCE in its latest research paper, robo-advice has apparent advantages in terms of low costs for clients, easy access, and few conflicts of interest in terms of commission, but its market pick-up has not been as fast as expected. Though promising, some important issues in terms of suitability amount others, related to robo-advisors has led to a lack of confidence in the ability of the current advisory technology to meet the needs of individual investors.
Currently, fintech companies are disrupting business models, but traditional institutions are acquiring or partnering with them to reduce costs and increase margins. The major financial centres and their regulators are well aware of the opportunities offered by new technologies. The financial market will start to use the main technologies such as big data, the Internet of Things (IoT), cloud computing, artificial intelligence (AI), and distributed ledger technology.