Greater focus is needed on the impact of emerging technologies on FS

27 October, 2017

Pictured: Damian Neylin, PwC Ireland FS Leader welcomes John Garvey, PwC Global FS Leader at the Financial Services Briefing 'Embracing or Ignoring Disruption'.

PwC 's survey of financial services CEOs reveals global concern over the disruptive influence of technology. Yet the research also highlights that the impact of emerging technologies on FS has not been seriously addressed.

The survey calls for

  • Greater focus on artificial intelligence and automation
  • More consideration of the impact of robotics on future skills requirements
  • Increased emphasis on protecting people's personal data

Speaking about the survey findings, John Garvey, PwC Global Financial Services Leader, said: "The financial services industry is being transformed by technological change, which is driven by changing consumer habits. But there are great opportunities. By really embracing emerging technologies and FinTech, businesses have a bright future ahead. Business leaders need to ensure that they map their people and their skills to the changing environment."

"By really embracing emerging technologies and FinTech, businesses have a bright future ahead. Business leaders need to ensure that they map their people and their skills to the changing environment."

John Garvey, PwC Financial Services Leader PwC Global

Technology risks are not being seriously addressed

It is worrying that very few Irish (6%) and global (14%) financial services leaders are seriously addressing the impact of artificial intelligence and automation on their business.

Almost nine out of ten (88%) Irish financial services leaders said that technology will significantly reshape competition in their industry in the next five years with global leaders believing the impact to be less (78%). The majority (69%) of Irish financial services leaders are concerned about the disruption this technological change will create but global leaders are more concerned (75%). Similar to global levels, just a quarter (24%) of Irish financial services leaders are addressing the risks from the use of social media. Data analytics, FinTech and the Internet of Things are seen as having the greatest opportunities.

Darren O'Neill, PwC Irish Data Analytics Partner, said: "While technology is creating significant disruption across financial services organisations, there are huge opportunities, particularly around emerging technologies. In a data-driven consumer world, investment in AI and robotics should be given proper consideration. Automation will play an even greater role in transforming business models in the future and the winners will be those who adapt the fastest."

More to do on considering impact of automation on skills needs

Over three out of four (79%) Irish financial services leaders reported that the availability of key skills is a threat to growth prospects (Global FS leaders: 73%). At the same time, less than half (44%) said that they are changing their people strategy to reflect the skills and employment structures they need for the future and is significantly behind global counterparts (72%). Less than one in two (41%) are considering the impact of artificial intelligence and robotics on future skills needs (Global FS leaders: 42%). The survey further suggests that global financial services leaders are more digitally savvy than their Irish counterparts. For example, less than half (44%) said they have strong digital skills (Global FS leaders: 53%) and less than one in five (16%) said they are active on social media (Global FS leaders: 41%).

Doone O'Doherty, Partner, PwC Ireland People & Organisation Practice, said: "Adapting the workforce for the skills of the future will be critical for long term success. In the years ahead we can expect to see greater human-machine collaboration. Moves to artificial intelligence and Robotic Process Automation will allow people at work to focus on more value-add work. Managing this transition efficiently may be one of the biggest challenges business leaders may face."

Greater focus on protecting people's data

Just over one in two (58%) Irish financial services leaders are of the view that how they manage and protect people's personal data will differentiate them (Global FS CEOs: 72%). Less than two out of three (56%) are seriously addressing the impact of the General Data Protection Regulation (Global FS leaders: 61%). At the same time, the survey suggests that Irish financial services leaders are more focused on seriously addressing cyber breaches than global counterparts (Ireland: 91%; Global: 58%).

Pat Moran, PwC Irish Cyber Leader commented: "Global financial services leaders have a greater understanding of the value of protecting people's data than their Irish counterparts. Global leaders are also ahead when it comes to planning for GDPR. In our experience, Irish organisations have been slow to recognise GDPR as a priority. As a result, they are not likely to be ready when it comes into force in less that 8 months time. This will have significant consequences which could include fines and penalties, along with reputational damage and potential damage to customer trust."

Political upheaval in Europe

Unsurprisingly, nearly all of the Irish financial services respondents expressed concern about Brexit's potential impact on the future of the EU. The majority felt that Brexit presents more challenges than opportunities for Ireland. About 75% of respondents did see opportunities regarding Ireland’s EU passport, and status as the only remaining English speaking member of the EU. Despite concerted efforts by all parts of government, respondents are still not convinced enough is being done. More than 80% wanted a national strategy for promoting Ireland as a location of choice in a post-Brexit world.

Damian Neylin, PwC Ireland Financial Services Leader commented: “Disruption in both technological and political terms has converged, potentially leading to a 21st Century industrial revolution. Ireland is well placed in terms of both its technology and Financial Services footprint. Yet, care is needed to navigate potentially choppy waters in the next few years, with the political changes in the EU. New technologies including AI and Blockchain must be assimilated into our workforce strategy."

ENDS

 

 

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