Financial sector at forefront of disruptive technological change

A report published, Disruptive Influences: Technology, politics and change in the financial sector, warns that a combination of factors has sharply increased political risk for the UK’s financial sector. Key risks identified by the report include:

  • Cyber security
  • Privacy and data protection
  • Automation of labour of services
  • Driverless cars, drones and advances in DNA screening
  • Fintech and changes in market infrastructure
  • Nanotech, control of rare earth metals and hostile artificial intelligence

The analysis by Cicero Group, commissioned by the Chartered Insurance Institute (CII), provides an overview of disruptive technological changes and their effects on politics and the financial sector. The report was launched to an audience of 100 executives at the CII’s headquarters in the City of London this morning.

David Thomson, Director of Policy & Public Affairs at CII said: “We hope this report can be an important contribution to the debate around the risks that face the financial services sector and the wider public as a result of rapid technological change. Insurers have seen some of this first hand and more will follow as developments like driverless cars could lead to an overhaul of the existing insurance markets. There are also opportunities, such as through the use of increasing volumes of data, but these will require safeguards to balance and protect the interests of industry and society.”

John Rowland, Executive Director at Cicero Group, said: “The world is changing at an unprecedented rate. The financial sector, crucial for allocating capital and driving innovation, is a crucible for this change. The current technological revolution is similar in some respects to the industrial revolution, but while there was time to adapt to the vast changes to society then, the same is not true now. Automation of labour in the services sector, for example, will transform the labour market and could threaten jobs on a large scale – this will result in a massive reallocation of human capital in the economy. It is now crucial that policymakers respond appropriately so that society is prepared for the changes ahead. The challenge is the same for industry.”