UK firms leading the way in robo-advisory: PwC
Written by Hannah McGrath
The UK’s financial services firms are leading the way in global efforts to automate processes through technology such as robo-advisers, according to PwC.
A global survey of 248 financial services organisations by the professional services firm found that the UK is leading the world in implementing robotic process automation (RPA) services, with 37 per cent of UK firms successfully deploying such tools, compared to 28 per cent globally.
However, while automated services are taking root in the UK’s financial services landscape, the survey showed that human interaction was considered a greater priority for UK firms than for their global counterparts.
UK firms were less confident than their global peers that they are meeting customer expectations with the right balance of personalised digital contact versus direct human contact. Of these, 27 per cent either strongly or somewhat disagreed that they have the right balance, compared to 13 per cent globally.
In addition, when it comes to technology investment, the UK’s focus on robo-advice appears to be at odds with the areas in which global players are committing, the survey found.
With the exception of robo-advisory, in relation to the technologies being pursued, UK firms are biding their time on the implementation of all other technologies, with a total of 29 per cent saying they had implemented big data, compared to 46 per cent globally, and 15 per cent of UK firms implementing Internet of Things (IoT) versus 31 per cent for the rest of the world.
Across all the technologies considered, UK firms are more likely to have no plans in the next two years to pursue use of new technologies including blockchain (29 per cent vs 13 per cent globally), 5G (34 per cent vs 17 per cent), and big data (15 per cent vs four per cent).
In addition, the UK is among the leading countries for FinTech growth in the next two years, alongside the US and China.
The survey found that 44 per cent of UK financial services incumbents have already embedded FinTech fully into their strategic operating model (compared to 48 per cent globally) while 27 per cent of organisations have also incorporated emerging tech into the products and services they sell (37 per cent globally).
The product or service area where UK firms are most advanced in incorporating emerging tech is payments, where 49 per cent have incorporated it (compared to 56 per cent globally).
In all other areas, the UK is playing catch up with the rest of the world in terms of its technological progress, including in traditional deposits (17 per cent vs 46 per cent), asset management (17 per cent vs 48 per cent), funds transfer (22 per cent vs 52 per cent), and mortgages (22 per cent vs 44 per cent).
The FinTech industry was cited as key jobs creator for 63 per cent of UK firms, compared to 75 per cent globally. However, despite the majority of UK firms hiring from technology companies as well as their own sector to access the skills they need, 46 per cent of organisations said they were struggling to fill the roles created.
In addition, when compared to global counterparts, the UK is much less successful in filling these jobs (17 per cent vs 33 per cent) while only 34 per cent of UK organisations have a c-suite executive responsible for leading their organisation's technology or digital strategy, compared to 41 per cent of their global counterparts.
Rav Hayer, UK FinTech leader and PwC partner, said: “We're seeing a growing shift towards hybrid human and robo-advice strategies, with even some of the pure-play robo-advisers hiring humans.
“Increased c-suite involvement will pave the way for more investment and bring a more attractive environment for real innovation and partnership with FinTechs, helping to bridge the gap with challenger banks for example.”
Hayer added that PwC’s research also suggested that priority areas of focus over the next 12 months will be cloud, big data and RPA, which, he explained, “aligns to the increasing focus on the power of data and the need for scalable computing, data storage and network capabilities to unlock this”.