By Raymon van Viegen, CFO, Visma | Onguard
While widespread business disruption has been a hallmark of COVID-19’s economic impact, digital transformation strategies have largely weathered the storm, mainly due to the part new innovations have played in keeping companies successful in times of uncertainty. Now, as new technologies have continued to emerge, organisations are taking the next steps in their digital roadmaps.
The idea that digital strategies are proving to be highly resilient is evidenced by findings from Visma | Onguard’s Fintech Barometer, now in its fourth year. The data reveals that the number of businesses planning to embrace a digital transformation strategy within the year increased from just 17% in 2019 to 35% in 2021. With this trend looking set to continue, alongside this is an expanding revolution in fintech adoption.
Turning to technology
Technology is a critical tool in facilitating the digital expansion in the financial sector, and additional findings from Visma | Onguard’s research show increased appetite among financial professionals. In the context of artificial intelligence (AI), almost half of organisations (47%) recognised this as one of the top three technology trends to impact the sector, a steep rise from just under a third (31%) in 2018.
Now, a greater number of businesses are harnessing AI-powered solutions to automate manual and time-consuming processes, reduce operating expenses and open up new revenue streams. With automation in place, this is allowing more professionals to free up time and devote more resources to value-adding tasks in their working day.
As supporting technology uptake grows, businesses are identifying a need to analyse data. This requirement rose from just over a third (37%) in 2020 to almost half (44%) in 2021. This is also driven by the fact that data is now playing a much more prominent role in organisational strategy, with an increase of 10% of businesses recognising that data supports their processes (up from 28% in 2020 to 38% in 2021).
This development is reflective of the fact that correctly utilised data has a multitude of use cases. This includes the ability to confirm an idea or strategy, or to drive effective insight to steer the business forward. With supporting technologies such as analytics and AI in place, businesses can wade through a sea of data that could previously only provide a broad set of information and break down the key information that’s ultimately linked to business goals.
Shaping future trends
Further stats from Visma | Onguard’s Fintech Barometer help to shape a story of upcoming trends, and blockchain appears set to play a significant part in the fintech revolution. This is where data is distributed across multiple points of authority in a database, and information can be updated across multiple computers in a network. Almost two-thirds (65%) of organisations have either already adopted the technology or worked out the first ideas for future adoption, up from half (51%) in 2018.
When considering how blockchain can be utilised, these findings are significant in revealing the future of fintech. It removes the requirement for separate accounts to be kept, and opens up the opportunity for purchase orders or invoices to be made obsolete thanks to the technology’s nature as a decentralised ledger. In the context of credit management, organisations can set up credit that is repaid by self-executing smart contracts with customers, establishing easier and more transparent trade, and providing a foundation for all types of transactions.
However, it’s not just supporting technology that is helping to drive change. More professionals in the finance sector are adopting a different mindset to new developments and changes in the industry. Fewer finance professionals stated in 2021 that they were resistant to change (15%) when compared to 2019 levels (23%). For technology to be adopted, professionals need to play their part in being open to using new solutions, and this looks set to continue over the coming years.
Significant change in the industry
While many industries have faced unprecedented pressure due to COVID-19, the restrictions imposed on others has led to an acceleration of digital strategies, particularly among organisations in the finance industry. Digitisation, data-driven insights and fintech are all growing in use, and this has been coupled by a mindset change, where businesses are more receptive to exploring previously untapped areas of technology and are willing to approach new solutions with enthusiasm.
Digital transformation strategies are now taking place over a shorter amount of time, suggesting that the focus is increasingly shifting towards them and organisations want to benefit from these implementations quicker. With these significant developments starting to take shape, it appears likely that the fintech revolution will take greater strides over the coming period.