“There are many industries that are experiencing rapid growth, and some that are in the process of taking off,” said Robert D. Bausch, president of the American Bankers Association.
“There’s also a tremendous amount of demand for certain types of technology.”
The biggest driver for innovation in the financial services industry has been automation, he said.
It’s also created a demand for more specialized tools that help customers find value and automate processes, Bauscher said.
The need for technology in the finance industry has become “the biggest challenge of our time,” he said, referring to the recent economic downturn.
For example, the Federal Reserve is moving toward a $100 billion technology investment program in 2018 that will help companies develop automated processes and identify trends that could help them meet the increasing demand for their products, the Fed said in a news release.
The new investments will help small banks create automated systems that can quickly identify, track and manage their assets.
The Fed is also planning to create a digital asset exchange to help facilitate financial trades and trade data across a range of asset classes.
A recent study from consulting firm Berenberg International found that the U.S. is a leading exporter of IT systems.
But it found that only 2 percent of those systems are used to support financial services, and about half of those were in the business of providing consumer-facing products, such as credit card processing.
Berenberg said its analysis showed that technology can help firms focus on delivering better customer service, and that it also offers a “potential to significantly reduce costs.”
“We see the potential for the financial sector to significantly benefit from this program and to gain greater competitive advantage,” said Berenburg president Peter J. Lohmann.
The Federal Reserve, Berenberg said, is investing $100 million over the next five years to create an online tool that will enable banks to identify trends in consumer lending, trade volume and asset pricing.
The program will also be used to improve customer support and automate transaction processing, Boudreaux said.