The financial services industry has undergone some significant changes in the last few years while at the same time feeling the tug of long-term shifts in the way that business is done. These simultaneous trends have meant that even everyday people are frequently commenting that there is something big happening right under their feet. We wanted to look at some of the most vital and interesting financial services industry trends and how it impacts those who work in that industry and everyone else.
Hybrid Work is Here to Stay (or so it seems!)
There were a lot of question marks about the durability of hybrid and remote work back in late 2020 to mid-2021. Millions of workers who could work remotely from home began to do so in response to actions taken by governments worldwide to try to curb the spread of the COVID-19 virus. This made sense in the earliest months of an uncontained pandemic, but many wondered how long the remote/hybrid work model would last. As it turns out, it appears likely to stay around. Gallup polling found the following:
It is still unclear if or when the hybrid work trend will end, but financial services employees should largely anticipate that they will continue to work in this fashion, at least for now.
“The Great Recession” is Still Felt in Some Ways
The time period between early 2008 and late 2009 is known as The Great Recession in the history books. It was a time when the housing market crashed and nearly brought down the entire financial system with it. It was only because of some lightning-fast moves by top bankers that the system as a whole didn’t come crumbling down all at once.
The impacts of that time are still felt in the financial services industry every day. One of the most significant ways they are felt is how the industry is (or is not) able to lend to specific groups of people.
Loose lending practices leading up to this period of time are at least partly to blame for what transpired, leading to the passage of the Dodd-Frank Act in 2010. This law clamped down on some of the worst excesses in the mortgage lending market, and its ramifications are still felt to this day.
Awareness of Cybersecurity Threats
It seems like there is hardly a day that goes by without news of yet another cybersecurity risk. Financial service industry companies are frequent targets of these attacks as they are rightfully seen as the place where people store their money. Investopedia puts a fine point on this by saying that financial firms are 300 times more likely to be attacked than the average business. Given this, cybersecurity threats must be taken seriously at all times. The threat and the risk of even one of these attacks being successful are too great of a risk for any bank to take.
Data is Improving Insights
Data is playing an outsized role in all industries across the board, and there is no doubt that it is a big deal in the financial services industry at this time as well. That data costs time and money to collect, but many in the industry feel that it is well worth the capital expense to understand their customers better.
From looking at spending and savings trends to examining individual customer behavior, it is increasingly easy for financial service providers to justify why they are spending what they are paying to get the powerful insights that they end up with on their customers.
Encouraging “Value-Added” Work
Amoung the many financial service industry trends is the move toward adding “Value-Added” work. Many tedious tasks in this world have to be done, and the financial services industry gets more than its fair share of these tasks. That said, the industry is now doing everything within its power to encourage employees to focus more on “value-added” tasks instead of tedious ones.
The upsides to working on tasks that genuinely add value include:
Why should people be forced to sit and do the same thing over and over and over again? Many of those processes can be automated at this point, and employees appreciate it when they are automated. Besides that, with the number of job openings at a record high right now, employers need to focus on retaining their people by ensuring that their work is rewarding.
- A more engaged workforce
- Slowing the causes of burnout
- Getting more value per labor hour
- Adding more value to the company in general
AP Compliance: Cross T’s and Dotting I’s
Financial service industry companies are already well known for keeping a very detailed and accurate set of their transactions. They have to in order to survive in the industry. That said, there is an even stronger push for AP compliance at this time.
Numerous institutions have been hit with penalties and fees for not taking care of the AP tasks in the proper fashion. Even a small difference between the numbers they record and the official numbers can create massive bureaucratic headaches. Thus, it is crucial to spend some time ensuring that employees follow along carefully with the instructions given in regards to how they take care of AP tasks.
Automation of Tasks
Finally, we come back to a point briefly touched on earlier: the automation of various job tasks is among the most impactful financial service industry trends. The repetitive, redundant, and flat-out time-wasting tasks are rapidly being automated away. The technology needed to create a fully automated workday continues to improve. This means that many financial service industry workers are now relieved of the burden of dealing with some of the annoyances they once had to deal with before this problem was largely amended.
These are just a few of the many financial service industry trends taking place in the industry right now. Keep an eye out for the other ways that the financial services industry is changing all around you.
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