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Current Challenges for the Financial Services Industry
Since the “Great Recession” began in 2007, the financial services industry has had to constantly adapt. Though the market is steadily improving, there are still hurdles and new challenges firms continue to face.
That’s why the candidates you consider need to be attuned to the market. They should be coming to you with current industry knowledge and insight on how to tackle the challenges your firm faces on a daily basis.
Here are just a few of the challenges facing the financial services industry today. Make sure your candidates are prepared to discuss them.
IFRS 9 & IFRS 17
All over the world, regulations are being put in place to prevent another market collapse. While these regulations are meant to make the industry safer, they also complicate manners for firms.
Two such regulations are the International Financial Reporting Standards (IFRS) 9 & 17. These standards, set by the International Accounting Standards Board (IASB), may seem intimidating to some banks who are not used to stringent reporting structures. But compliance with these standards could open up opportunities for these financial institutions to succeed. Add these steps and measures, and your firm could yield incredible results.
Though there may be a small adjustment period, this challenge could be incredibly beneficial at the end of the day.
Social Media Scandal
Social media is under fire in 2018. Data misuse and the spreading of false information has brought many social media platforms – particularly Facebook and, to a lesser extent, Twitter – down a peg. People are less trusting of what they read online and, in some cases, are staying away from it altogether.
This can be tricky for some financial institutions to navigate. It’s very difficult for any business – big or small – to avoid maintaining some sort of social presence and still have any share of voice in the market. It is a necessary and useful tool, but only when used properly. This is sometimes a difficult line to walk.
Different institutions are testing the waters and finding a voice, while also ensuring that the data and information they share is accurate and reliable. The last thing any financial institution needs is to lose the trust of their audience. So precautions have to be taken and these tools must be implemented with great care.
This is especially true when interacting directly with clients and customers via social media profiles. The manner in which you engage people on social platforms matters. You must maintain a professional, but unique and friendly voice that people can rely on and communicate with easily. Handling complaints and criticism with sincerity and urgency will get you much further than a blind defense. Becoming an accessible financial firm in this way could give you a leg up, though it may take some practice to master.
Financial technology has been on the minds of financial services professionals for some time now. Fintech was not always readily trusted, and understandably so. This technology is just now coming into its own and proving its worth.
Some forms, like cryptocurrency, are still under scrutiny. But others, often powered by artificial intelligence (AI), can improve efficiency and offer investment advice. Models have the capacity to detect risk and prevent a financial catastrophe. This tech can even reach out and help people who would not normally have access to financial planning and advice.
These tools make the financial services industry safer, more accessible, and more modern. It’s just a manner of firms catching up with the advancements. Once they do, they will see the benefits it can offer.
An Abundance of Data
There is a vast pool of data out there for financial firms to dig into. Whether you have AI bots or a team of professionals mining this data for insights, you may come to find that there is such a thing as too much information.
Take the time to understand the insights you are gathering. What do they mean in the aggregate? If any of them contradict each other, investigate why that is the case. And most importantly, discern with insights are the most useful to you, your financial institution, and your customer base.
If you are looking for financial services professionals who are in tune with the market and the challenges facing it, reach out to the expert recruitment consultants at Michael Page today.