You’ve probably heard plenty of predictions in recent months related to the so-called “digital transformation” throughout the pandemic: Some argue we’ve seen the shift toward all things digital accelerated by five years; others, by 10.
Either way, at Fortune‘s Brainstorm Finance virtual conference event on Wednesday, financial industry heavy hitters were all in agreement: The world has changed for good.
“I do think, for sure, the world has leapfrogged into the digital era, and that we are clearly in maybe chapter two of the digital economy,” PayPal’s president and CEO Dan Schulman says. He’s even willing to make a big prediction: “I think there’s going to be more change inside the financial system in the next five years than there’s been in the past 20 or 30 years.”
And Schulman isn’t alone. Roger Premo, general manager of corporate strategy at IBM, argued that the past year has ramped up “a process that was moving slowly prior to the pandemic,” he says.
Whether in the digital wallet space, the banking system, or in creating the underlying tools for companies, here’s what financial industry execs are witnessing in their own businesses that’s likely to shape this new chapter of the digital-first economy.
A mobile-first banking experience
Banks have had mobile apps for years, but Ather Williams, senior executive vice president and head of strategy, digital platforms, and innovation at Wells Fargo, argues the pandemic has pushed financial institutions into reorienting their offerings.
“For many of our customers, they think of Wells Fargo as the app—it’s no longer the branch on the corner,” Williams says. “And so we’ve been really focused on how we get to a mobile-first mindset and transform our capabilities into online and mobile.” But, he adds, “not mobile only.”
He argues branches won’t be relegated to a thing of the past, as many customers still prefer a “face-to-face” experience when it comes to advising on their finances. But customers are increasingly looking for ways the bank can use their data and information to offer more personalized services, Williams says. He uses the metaphor of a radio station DJ’s playlist versus a more tailored Spotify selection: “You’re in a Spotify world that wants to say, ‘I know you, I know what you like to see, and I can customize what you see.’ So using the data that we know about our customers and customers like them … is a critical path for us.”
That’s also where the underlying technologies banks and financial firms are using come into play: IBM’s Premo highlights his company’s financial services cloud as one that’s helping companies maintain security and compliance while the industry “evolves.”
‘High-touch and high-tech’
For those in the market, routine tasks such as buying life insurance or receiving financial advice probably won’t look the same as in the pre-pandemic days.
That’s what Caroline Feeney, CEO of U.S. insurance and retirement businesses at Prudential Financial, is seeing—with the firm’s advisors increasingly connecting with clients online or over video.
She calls it a “marriage of high-touch and high-tech,” and “it’s enabled them to reach more people, to provide advice to more people, to be far more efficient in the way that they work,” she says.
Those kinds of services have been around since before the pandemic, of course. But Feeney says adoption of such technologies has skyrocketed through the pandemic.
“I believe this is fundamentally a game changer for us,” Feeney says.
The ‘promise’ of cryptocurrency and ‘super apps’
Cryptocurrency may well be the most zeitgeist-y asset in the financial system right now. From the massive rally of joke cryptocurrency Dogecoin in recent days to the public debut of cryptocurrency exchange Coinbase, it seems everyone—even institutional firms—is looking to get into crypto.
For CEOs like Schulman, however, the “promise of cryptocurrency” moving forward isn’t so much in watching Bitcoin go to the moon: “Why I’m so excited about it is not really the trading element of it,” he says. “It’s the utility of payments that you can increase when you use cryptocurrencies: putting a smart contract onto a payment, digitizing assets, and viewing a payment with certain characteristics.”
“That to me is really the promise of cryptocurrencies,” Schulman adds. “Can we pay for things in ways that move us ahead from what we’re doing today, in ways that add value and add utility?”
And whether or not you’re holding Bitcoin in an app like PayPal, Schulman also believes we’ll see more and more “super apps” emerge, where customers can get everything they need from one place and “one login,” he says—from payments to shopping to consumer financial services.
