Navigating the technological landscape in 2023
By George Ralph, RFA
Published: 20 March 2023
Advancements in technology are developing at a rapid pace, fuelling even faster change and progress in the world of financial services and asset management. In 2023, the technologies that are continuing to gain even more traction are automation, collaboration and of course, cybersecurity.
George Ralph, Global Managing Director & CRO at RFA explores these three technologies in greater detail, explaining why they are essentials tools for professionals working in the alternative investment sector.
Let’s start by explaining that I see navigating the technological landscape in 2023 will be like participating in a game of chess. With regards to cybersecurity, defence remains a key priority. Playing conditions have never been as volatile as they are today. Yet, in this game of chess, there will be windows of opportunities that provide leaders with the chance to attack and embrace innovation.
If we look to automation, businesses are becoming increasingly more reliant on this technology. Automation should be seen as a suite of technology options that can carry out tasks that would otherwise be conducted by humans freeing up time to focus on performance and strategy. Traditionally speaking, the financial services industry has lagged behind when it comes to the implementation of using automation to streamline operations of day-to-day tasks.
However, with automation, businesses are able to relieve already overworked teams from tedious and time-consuming tasks and direct their time elsewhere. The implementation of automation can not only reduce costs, but also improve overall productivity. This can be beneficial in terms of staff retention and overall job satisfaction.
When employees are overloaded with tasks, and are overworked in the long term, this can lead to job dissatisfaction and burnout. The likelihood of leaving their job therefore increases, and we know that competition is fierce to retain or employ the best staff at the moment. The Financial Conduct Authority (FCA) recommends firms utilise automation where possible within the Sysc 13.2 framework as a way also to reduce human error.
‘The Great Resignation’ was a widely discussed topic last year. In May 2022, Enterprise Times shared findings that finance teams were specifically impacted by people resigning due to job dissatisfaction. Researched from IFOL established that 73% of finance professionals believe that staff productivity and morale is a cause for concern. 78% of professionals from the same study stated that manual work is overwhelming for teams and people are left feeling as if they cannot keep up with their workload.
Embracing automation in 2023 can be a solution to this problem as teams can be relieved of manual workloads and reallocate their time to others. For businesses that are prioritising international growth, implementing automation for operations should be a necessity. In such efforts, time is a highly valuable asset that needs to be distributed wisely. In an articled shared by Enterprise Times in 2022, 16% of finance professionals stated that their financial operations as they currently stand limit growth and are an obstacle for firms wishing to streamline for international success. Perhaps what is even more interesting from the same article is that 29% of finance professionals have stated that they have seen more manual finance tasks in the past two years. This almost counters the notion of accelerated digital transformation that was highly documented since the onset of the pandemic being a success.
The next year will be a challenge for executive teams in the finance sector with potential freezes on hiring. Automation could help businesses with these potential threats, support growth and boosting staff morale. However, the key to automation is that, regardless of its prevalence in the media and the promotion of its benefits with regards to streamlining operations, lowering costs and aiding employee retention, it is only as good as its execution. Firms need to strategise for how they will implement automation in their business and the technology they will use to do so. For example, we have completed automation for firms globally around Annex 4 through to onboarding and offboarding of third parties, staff and deals. This strategy will need to be laid out with long term goals in mind, whilst keeping space for making continuous modifications in the face of technological developments.
A fundamental requirement for all successful businesses in 2023 and beyond will be collaboration. Without the capacity to collaborate using remote platforms, businesses will stunt their ability to grow. In an article published by Harvard Business Review back in January 2023, it was cautioned that executives this year will have the challenge of not just embracing individual technological trends, but rather, they will need to think about how all technological developments will create new possibilities when used together, thus creating combinatorial trends.
Growth in use of collaboration software was fuelled by the rapid transformation of offices embracing hybrid work. Three years on from that sea change, collaboration is a necessity and cloud technology is the tool to help empower businesses to do so successfully.
Prior to 2020, it was much more usual for collaboration amongst teams to occur via in-person meetings and any technological platforms served as a complement to this. Now, teams collaborating via technology is commonplace and for some businesses, it is the medium used the most. Cloud collaboration tools offer teams a way to work that is convenient and ideas can develop faster. However, whilst the use of cloud collaboration tools can empower businesses, there are also limitations to their implementation. If teams are only communicating with their colleagues via technology, there is a threat that they will not feel a connection with each other and perhaps even the organisation’s culture.
Finding opportunities for team building and social collaboration will be vital to ensure staff find a purpose and feel integrated. For example, we utilise Yammer, Viva and other tools for social events, charitable functions and more to ensure teams can meet up in and out of work and also discuss topics there are passionate about or have as shared hobbies. Relationships are important in businesses and serve to be the fabric in which a company is held together. Whilst cloud collaboration online can serve as a way to be productive and to get work done effectively, organisations also need to strategise for ensuring that employees have a deep form of collaboration when they are onsite that focuses on relationship building and establishing meaningful connections with managers and colleagues.
Yet perhaps one of the most vital considerations for collaboration in technology leads us into our final thought: cybersecurity. Collaboration via cloud technology enables people to share resources and data online. However, in today’s world, threats are continuing to increase in both sophistication and volume, thus collaboration needs to be secure. In hybrid work environments whereby team members are located in many places at different times, it is critical that they are able to carry out their tasks and communicate with each other and clients in a manner that is both secure and seamless.
Cybersecurity is an absolute priority for all business leaders globally. This is for all sectors and not simply the financial services industry. At the start of the year, Gartner, Inc predicted that by the end of the 2023, 65% of the world’s population will have their personal data covered under modern privacy regulations. This is up from 10% in 2020. In the US, there will be five major states rolling out new comprehensive data privacy laws this year.
Looking further ahead, Gartner predicts that by 2024, organisations ‘adopting a cybersecurity mesh architecture will reduce the financial impact of individual security incidents by an average of 90%. By 2025 ‘60% of organisations will use cybersecurity risk as a primary determinant in conducting third-party transactions and business engagements. Investing in cyber-defense will be critical for all businesses worldwide. In short, the adoption, design and implementation of a cybersecurity strategy will be a necessity for businesses. The financial risk and the potential loss of data is too far too great for businesses to think otherwise.
Whilst the world of business and finance can be unpredictable and at times volatile, what is clear is that in 2023 and beyond, leaders will need to think like a chess player and craft their own strategies for the careful implementation of automation, collaboration and cybersecurity within their operational structures.