Technology used to be very impersonal. As employees, we become numbers in the workforce. As citizens, we are sometimes treated as a number to be referenced for specific purposes whether it is for medical, tax or as an electorate.
The digitalization of businesses has tried to de-emphasize this number into a person with feelings and preferences. If there is to be a benefit in all of this digital transformation, it is that consumers are finally being treated as individuals. Welcome to the world of mass personalization of one.
We owe this much to things like social media, virtual reality, Internet of Things, artificial intelligence, and scores of technologies and innovations yet to be discovered.
Companies in the financial services industries, particularly those in the retail segment, were among the first to recognize the potential of personalization. You hear terms like customer experience design being thrown in with user experience as organizations try to discover ways to create compelling experiences for customers. They know that choosing to ignore such is tantamount to long-term irrelevance.
Michael Araneta, associate vice president, IDC Financial Insights, predicts that 2019 will be the year when financial institutions build omnichannel capability that will enable them to be present where the customer is, and engage in the right time and with the right context.
At the IDC Financial Insights Asian Financial Services Congress 2019, Cyrus Daruwala, managing director for IDC Financial Insights introduced the term “humanly possible” as the evolution of financial services into more personal, creative, and open. But one area he believes may not be ready for this “humanly possible” evolution is RegTech.
Trending on RegTech
RegTech or regulatory technology was created to address regulatory challenges in financial services through innovative technology. Its purpose is to use technology to help organizations comply with regulations more efficiently and at a lower cost.
According to Daruwala, IDC estimates that about 5-7% of bank’s budget is spent on IT. Of this amount, 20% goes to cover governance, compliance and IT audit. He believes that spending, particularly on the compliance and governance will only continue to grow.
He says new technologies like artificial intelligence and cognitive computing are only going to introduce even more regulation, more costs to financial institutions, in the years to come. He cited the example of India which is spending hundreds of billions on the introduction of a unified identity system for citizens.
RegTech - resistant to be human
“Humanly possible is the bank’s way of being affable to the customer. Banks will cognitively provide the services that the customer wants. Regtech is not going to be happy with institutions that pry into the customer’s life unless consent or opt-in is given,” said Daruwala.
He opined that a time in the future is coming when regulation will drive a wedge in the personalization journey of banks calling for consent to be given before any form of engagement can happen. In that future, technologies like artificial intelligence will take a backseat to regulation.
Watch the full video as Daruwala shares in detail IDC’s predictions for RegTech in Asia-Pacific. Peer into specific areas of the discussion as below:
- What is IDC’s forecast for RegTech in 2019 and beyond? 4:34-6:43
- Can you apply the "Humanly Possible" concept to RegTech? 7:48-9:38
- Will there come a time when banks say enough regulation? 9:38-11:07