UK financial services trailblazing on automation

Financial services firms in the UK are implementing robo-advice at a higher speed than the rest of the world as they work to attract consumers, according to PwC.

The ‘Crossing the Lines’ FinTech report, which surveyed 248 global financial services firms, found that 37% of UK respondents had implemented robotic process automation (RPA), compared to 28% globally.

However, PwC noted that the tilt to expand robo-advice capability is also offset against the need to maintain trust, with a consumer base demanding human interaction for priority services.

UK FS firms were less confident than their global peers about meeting customer expectations with the right balance of personalised digital contact and direct human contact – 27% either strongly or somewhat disagreed that they have the right balance, versus 13% globally.

Rav Hayer, UK FinTech leader and PwC partner, commented that there is a growing shift towards hybrid human and robo-advice strategies, with even some of the pure-play robo-advisers hiring humans.

“Most consumers want the reassurance of some human oversight alongside access to a human adviser for key decisions. FS firms face a dilemma on how to balance the need for that human interaction with the digitally enhanced offerings customers also expect,” Hayer said.

“The fact that personal human contact is globally near the bottom of the list of ways in which some executives think FinTech should be used to retain customers raises questions about the balance.”

UK is, together with the US and China, being listed as the leading countries for FinTech growth over the next two years, and PwC noted that this is due to a focus on cross-border growth alone.

However, when it comes to implementing other technologies, the UK has taken a backseat compared with global players. In all, 29% have implemented big data, versus 46% globally, and 15% implemented IoT, compared with 31% globally.

The UK is also more likely to have no plans in the next two years to pursue technologies such as blockchain (29% versus 13% globally), 5G (34% versus 17%), and big data (15% versus 4%).

“The focus to date has been on incorporating emerging tech across payments, personal finance and insurance, where 49%, 37% and 32% of respondents reporting emerging tech as already being incorporated,” Hayer explained, highlighting that the greatest priorities over the next two years are asset and wealth management.

The extensive analysis collected the views of more than 500 FS and technology, media and telecoms firms. Of the respondents, 41 hailed from the UK. Seven in 10 (73%) of these represented organisations with more than $1bn annual revenue.

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