Impact of evolving regulation on IoT in financial services

While many see financial institutions at the helm of many of today’s innovations, it wasn’t too long ago that industry practitioners saw their organizations as laggards when it comes to adopting emerging new technologies.

Yes, financial institutions are one of the top spenders when it comes to technology but often the technologies being adopted have already proven themselves in other industry verticals and, more importantly, have received the blessings of the local regulator as well as global industry bodies.

Case in point, public cloud has been in use by consumers (in the 1990s) and some industries like retail (as early as 2002) but in mature markets like Hong Kong, only a few banks have agreed to start including cloud in their IT strategy.

The rise of Fintechs may have changed the thinking of financial institutions as to what emerging technologies should be included in the product roadmap.

“Faced with thinning margins and subdued economic outlook, there is a pressing need for banks to enhance performance, simplify operating models and re-engineer legacy technologies, while still ensuring cost management and regulatory compliance. Thus banks need to seek more cost-efficient technology-enabled regulatory and compliance solutions,” said Chris Lim, partner at Ernst & Young Advisory based out of Singapore.

In an exclusive interview with FutureIoT, Lim openly discusses the challenges and opportunities financial institutions must face as they evaluate and adopt IoT as part of their business strategy.

According to the Deloitte Center for Financial Services research, there are near- and long-term opportunities for the financial services industry to see the benefits from IoT.

Jim Eckenrode, managing director of the Deloitte Center for Financial Services, said: “But the IoT may be as broadly transformational to the financial services industry as the Internet itself, and leaders should make an effort to recognize the opportunities and challenges it presents for the financial sector as well as for industries with which FSIs work closely.”