Revolution is here with us and will demand high skilled workforce for banking as well as the emerging digital economy.
What will the banking industry look like in the next few years? Going by the number of financial technology (Fintech) solutions that come to market every year, there is no doubt that the sector faces major disruption.
There will be new business models that we probably can’t envision today. Some intermediaries, including regulatory authorities, will be disrupted. But the sector does not have to be a sitting duck.
The sector could lead its own disruption through intensive research and studying how emerging technologies can be leveraged to provide customers with what they need or they can sit and wait for a worst-case scenario where someone else leads the disruption.
The discourse on the sector’s future direction has started in earnest. Last week I attended the Society for Worldwide Interbank Financial Telecommunication (SWIFT) African Regional Conference 2018 in Kigali, Rwanda, as one of the speakers.
The conference theme, Transforming the future – driving a digital economy, aptly captures the essence of the emerging 4th industrial revolution. The basis under which the disruption in the banking sector is imminent. This conference was important in many ways.
It marked the beginning of a formal discourse on the emerging concept of digital transformation. In spite of the fact that information and communications technologies are impacting the banking sector most, the sector has been slow to leverage the transformative potential of the emerging technologies like Blockchain, Artificial Intelligence, Internet of Things as well as Big Data. SWIFT, which provides a network that facilitates inter-bank financial transactions in a secure, standardised and reliable environment could be disrupted if the adoption of Blockchain and Artificial Intelligence becomes widely used in the banking sector.
Blockchain technology is already being used to speed up cross border payments in a more simplified process that reduces costs significantly without the involvement of any third party. The good news is the fact that SWIFT has been conducting own research on the applicability of these technologies but have no conclusive evidence that their application would have adverse effects in the industry.
The painful reality is that we have no choice but to simply adopt these technologies. Virtually every research project into the impact of technology on the banking sector concludes that the use of technology in the delivery of banking services is widely prevalent and its application is helping to reduce costs and eliminate uncertainties.
However, as with the old saying, “no good deed goes unpunished.” The greatness of technology is invested with cybercrime, most of which comes from dishonest employees. The benefits of technology, however, outweigh the risks. Going forward, the bigger problem will be lack of human resource capacity in tackling cybercrime as well as enabling digital transformation.
This will require greater knowledge than at any time in history. In a recent paper that I co-authored with Tim Weiss, we warned that, “the rapid evolution of knowledge challenges the fundamentals that existing education systems and learning models are built upon and severely complicates the reliable supply of skilled human capital.”
We recommended a diverse set of local and international education organizations that provide robust life-long learning models with online and offline components tailored towards a diverse set of demographic groups.
Digital technologies, for example, can foster basic knowledge diffusion or the assemblage of individualized curricula. Similarly, fab-labs, maker spaces, co-creation spaces, design thinking institutes and startup labs can provide decentralized low-cost environments in standalone organisations, private companies or universities who catalyse knowledge diffusion and applied knowledge testing and creation.
Likewise, building digital literacy and instigating the acquisition of sophisticated digital skills can be achieved through applied and curated lectures in rural and urban settings, apprenticeship models, the boot camp model or in a continued and long-term education model for demographic groups who face disproportionately high entry barriers.
Similarly, private sector companies can endorse life-long and cross-sector learning models amongst their employees and in collaboration with externals. There is no doubt that the 4th Industrial Revolution is here with us and will demand high skilled workforce for banking as well as the emerging digital economy.
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