Opportunities During Volatile Times

While the current volatile market may bring a certain amount of uncertainty, it also represents opportunities for the banks to open new revenue streams during these difficult times. Banks and brokerage will have to become much more aggressive and must look to diversify their business to offset the decreasing revenues. Financial advisors will have to play a critical role in helping investors to recognize and leverage those opportunities and capitalize on risk.

Because of the threat of the Covid-19 pandemic, it is expected that revenues will start to move downwards. However, on a positive note, there is a noticeable trend in the spike of new entrants to the market, reflected in global financial centers. This significant increase of new entrants comprises low to medium size investors that are often neglected.  Banks have an opportunity to service these new, low to middle entrants, and offset their decreasing revenues. This can be achieved without increasing costs of operations, and staff, instead, banks will have to switch to digital automation.

By transferring to digital automation, banks will successfully broaden their reach to include a wider base of customers including the low-to-middle income investors and not just the HNW individuals. Even though there may be redundancies in the middle and back office during this time, the digital automation will off-set these redundancies and make way for continuing coordinated and streamlined transactions.

Banks can save significant costs just by adopting Digital Transformation technology, and achieve this increased reach, without a huge increase in operations. By adopting digital technology platforms, banks will be able to automate and digitize the entire investor recruitment, onboarding experience and manage the investment process. Thus, the banks' can expand their reach to more customers and efficiently manage their operations without adding more costly resources. Currently, banks are continuing to underserve this market and now is the time for them to introduce investment offerings to their existing customers who do not have access to Financial Markets.

With these digital financial technologies, banks and customers will have the privilege of making transactions easier wherever they are. Banks will be able to operate remotely and introduce cashless transactions, contactless payments, and branchless banking. These banking upgrades will surely provide the investor with a total banking convenience. Also, human interaction will be replaced with more online chat and video meetings which may become the norm in the coming years.

The risk lies when Banks attempt to develop their own in-house technology and fail due to lengthy timelines that require years of intense research and investment.  They end up employing a large number of developers and incur high development costs. Upon finishing these products and services, it could take another year for the Bank to implement and Go-To-Market. Instead, the best advice for banks is to partner with an agile, experienced Fintech firm to develop their concepts and launch investment management services efficiently.

In these challenging times come great opportunities, opportunities that banks and financial institutions must recognize, act decisively and take advantage of. The market will not remain volatile all the time and downtime must be sustained accordingly. We at Tradesocio provide the Digital Transformation technology that will deliver on these opportunities. And to deliver on the opportunities, decisions have to be made now.

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Wael Salem
Chief Executive Officer at Tradesocio