Jobs within Finance are constantly evolving therefore, as a jobseeker, you need to be aware of what trends are affecting the profession and any key legal changes within this sector.
Due to the COVID-19 pandemic, there have been fundamental shifts and financial technology (fintech) innovations throughout the past two years. Companies in all industries have had to modernise their core financial systems, adapt to a cashless society, and use fully digital banking.
We predict the emerging trends in Finance will include the demand for instant checkout, increased use of cryptocurrency and the widespread adoption of embedded finance.
Key Trends affecting the Finance profession
Here are a few topical trends that jobseekers in Finance may need to be aware of:
Technology in Finance has seen many advancements recently. The use of software within Finance jobs is being implemented at an accelerated rate. Some examples of these include:
- Embedded finance is when non-financial companies offer financial services through their technology platform. For example, when a retailer offers a payment plan to spread the cost of the purchase over 12 months, rather than the consumer paying upfront.
- One-click checkout has been available from some retailers for over a decade, and this has revolutionised the customer experience. As ecommerce continues to go mobile, digital payments are expected to overtake credit cards and cash. One-click payments, where little to no extra data is needed from the customer to complete a transaction, are likely to become the norm.
- Smartphone payments will play a huge part in the demise of the physical credit card and the increase of one-click payments.
- Web3 is a new iteration of the World Wide Web, whereby the internet becomes decentralised and is rebuilt on user-driven ledger technology, known as blockchain. In Finance this gives prevalence to decentralised finance (DeFi), where funds are exchanged without the use of banks or brokers, however this could result in an increase in financial crime. The further evolution of web3 should deliver solutions to the lack of consumer protection and create a safe online environment.
Cryptocurrencies have been around since 2009, and although many of us are still unsure how they work, it’s use is predicted to increase further. With the decentralisation of the internet through web3 and the increase in digital one-click transactions via our mobile phones, this form of payment through a unit of currency that is an encrypted data string instead of gold bars or bank notes, looks to be the next step in the evolution of money.
Open banking is the term used for third-party financial services who access consumers’ data (with their consent) though the use of an Application Programming Interface (API). Using this data, the API can compare your transaction history and suggest more economical alternatives. This should result in consumers having more control over their finances and clarity on their spending habits.
Post pandemic recovery and growth will be a leading trend for most businesses over the next few years, in particularly for the banking industry.
To assist with the recovery, there will likely be plans to increase investment through the provision of loans and grants, injecting capital into the banking system. Governments are expected to increase their spending on public assets, reduce taxes to promote domestic spending and encourage international spending though trade agreements.
There will be many influential elements to aid the recovery, including tech and software developments, the redefining of the workplace, highly skilled and collaborative teams, the challenge for attracting top talent and the desire for job roles that embed a higher purpose.
Technological advancements, digital transformation, sustainable investments, and the desire to eradicate climate change may lead to further innovation in the finance sector.
As they help industries to become carbon neutral, offer support in the communities they operate in, and work towards eradicating financial exclusion, the banking, insurance, investment, accounting and fintech industries are set to become an integral part of the innovative financial system of the future.
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For corporations, open banking could improve the way companies track their financial performances, facilitate audits, and simplify their payroll and accounting.
Sustainable investing has come to the forefront over the past few years. Socially responsible investing is where the environmental and social impact is examined before contributing money or resources to a venture. Sustainable investing not only looks at the possible financial gains, but also what benefits are made to society at large through the investment.
Agile transformation is a new approach to working in an ever-changing situation, and within finance, this applies predominantly to the banking and insurance industries. Agile transformation is designed to help financial services organisations accelerate the delivery of new services and products to the market.
Changes to regulations for car and home insurance came into play from January 2022. These new rules are to prevent ‘price walking’, whereby low prices are used to attract new customers, only for the prices to be increased with each policy renewal. These new rules are to ensure that renewing customers are charged the same as new customers.