Millennials and the evolution of the financial services industry

Steve Taylor, Head of Technology & Architecture

I was at a conference recently and a fascinating topic was discussed at the keynote; the impact of the “hoodie and flip-flop” generation on how we work.  Specifically, what role will the Millennials play in financial services, and how will this generation and future generations change and shape the business processes within our industry?

From my viewpoint it starts with technology. Millennials have grown up in the Digital Age. They have always been familiar with the internet and, have ascended into adulthood during a period marked by tremendous technological advances, from the growth of the internet, to the development of smart phones and tablets. A recent InformationWeek article further hardens this observation “74% of respondents say there’s a difference in approach to technology between workers under 35 versus those over 35.”

The next generation, “Generation Z”, will be even more digitally aware and will have completed their education using a completely different set of tools, technologies and, more importantly, techniques than previous generations.  We’re already starting to hear about IT outside of IT, where technology projects are embedded into traditional business units.  In some cases even more progressive approaches are being explored where IT is embedded across business teams.

So what does this mean for our industry and ultimately how we think about software design?

First, the notion of “everything as a service” will become completely natural; you pay (or not) for what you consume and the specifics of application implementation are abstracted behind a secure and accessible application stack. Knowledge becomes more “real-time” and the inquisitive can immediately search or read on a topic whenever the desire strikes.  Documents are replaced by content sensitive, search-enabled wikis or how-to videos.

The second notion is the natural assumption of access anywhere, any time – regardless of the device or location. This isn’t new, but it will change how we think about architecting and ultimately packaging “applications.” The application will shift to support a more discrete portfolio of apps, each with their own release schedules and development teams.  Application program interfaces (APIs) will continue to advance and where applicable, application stacks will continue to expand the use of open-source technology.  Each app will be designed with the user and their preferred interaction method in mind — context-aware computing. This will drive the technology choices and how the shared API layers are architected.  Apps will likely have a shorter lifespan and be aligned to consumption models – from laptop to tablet to phone.

In our industry, user convenience will continue to challenge the traditional enterprise security models. Apps could be tiny, built for a specific purpose or a specific individual, and they will likely leverage common tools and technologies presented via a secure app-store. Users will have more choice based on their own work preferences, for instance, a notification may be sent via Twitter or a report dropped on a secure “box” site, all accessible via an integrated set of applications and platforms. Leveraging these rock solid, extremely scalable applications will reduce cost and increase agility for those willing to keep pace and stay aligned to the millennial generation. It will no doubt create challenges for compliance and risk management; which may help focus the tools and technologies chosen.

Arguably the most exciting thing we may see with the continued introduction of Millennials into the workplace is a pattern I’ll describe as “accelerated technology commoditization.”  Users and communities are keen to solve a problem once and create a framework that allows others to leverage it again and again. An industry standard or set of open-source libraries and models that can be adopted by our industry would accelerate time to value and improve code quality. Simple algorithms and data-integration models could well be the first place we see a greater level of collaboration across our industry. By commoditizing these pieces that don’t add value, firms can focus on higher-value opportunities with their business partners.

There are certainly going to be challenges as we look out across the next five to 10 years.  We’ll continue to see the adoption of open source and a new approach to SOA.  This will hopefully bring a wider commoditization of industry standards and technology.  Maybe, by the summer of 2020, flip-flops will be as common place as the tan loafer….

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