Crunch Time for Covid-Era Tech

Last year saw a series of unprecedented and unexpected events, including—and resulting from—the Covid-19 pandemic, such as exchange floors shuttered, 90% of capital markets employees working remotely, trading systems overwhelmed by the resulting volatility, and perhaps most surprising of all, financial firms raking in record revenues, despite an economic near-catastrophe.

With efforts to return to normalcy thwarted at almost every turn, these changes look set to continue through 2021, though who knows what additional twists of fate will arise this year. And with the status quo likely to stretch into 2022, short-term measures are now being reassessed, and incorporated into medium- and long-term strategies. So, what should we expect in the world of fintech this year?

First, working remotely is no longer a short-term contingency plan. Entire workforces have been working remotely for the past 9-12 months, and in many cases will continue to do so for some time to come. Solutions hurriedly thrown together to keep businesses running last year must now become permanent and powerful. As remote working becomes the norm, IT architectures also need to work remotely by becoming virtual.

Ironically, for IT to be virtual and distributed, data needs to be more centralized, and the dynamics of this Covid era are ironically both driving and hindering change. For investment firms that typically operate in silos, working from home during the pandemic has heightened the need to break down silos and highlighted the importance of ensuring everyone is working from the same dataset, say officials at Ledgex, a provider of data management technology for buy-side firms.

While solutions like Ledgex’s may give users more confidence in their data, they don’t replace the feeling of working within those silos. So I expect collaboration platforms to become more widely adopted and used in 2021, and to integrate more content and tools to fully replicate users’ workflows, bringing content and capabilities to consumers, making it easier for them to access what they need, while making it harder for outside agents to access or disrupt critical systems and networks.

Once firms can access the data and tools required for staff to do their jobs from anywhere, the result could be that financial firms’ expensive offices that remained largely empty during 2020 may be relics of the past. If staff can work from anyplace, then they don’t need to be in a specific place. And if home will suffice for much of their work, then firms can right-size their office space based on how many employees need to be in the same space at the same time. Similarly, most business travel—except, perhaps for closing high-value M&A deals—may no longer be needed, and could be replaced by video calls and e-signatures.

Filling the Void

The pandemic has created opportunities as alternative methods of communication have boomed. For example, UK-based Citycom Solutions has grown from 10 to around 40 people and raised around £200,000 in new funding from its existing “friends and family” investors to develop and grow its surveillance offering.

Originally in the business of monitoring, recording, and transcribing phone calls, Citycom recognized that the growth of videoconferencing apps during the pandemic created a “minefield” of potential opportunities for abuse, as these new channels were largely unmonitored. The vendor launched a first iteration of its tool last year, and has since developed it into a full-fledged product, dubbed Arc (Augmented Reality Compliance), which can record and analyze video calls and monitor employees working from home to ensure they are fully compliant with regulatory requirements and a firm’s security protocols.

Arc can capture 900 images within 30 seconds to build a biometric profile of a user. It can use facial and voice recognition to validate identity. It can identify objects such as cell phones or alcohol bottles that might create compliance concerns. It can “read” handwritten notes. It can recognize suspicious gestures like miming “shhh” or “call me” that could indicate someone trying to communicate offline from their monitored environment.

In short, Arc is like having your own individual compliance officer monitoring each employee at home. Intrusive, maybe; but compliant, yes. I expect to see this technology—or similar home-grown solutions—become an integral part of any software designed to be used remotely in regulated markets.

Being able to spot opportunities such as this to not just exploit a bad situation, but offer solutions that benefit the industry as a whole, is what will set the innovators of this Covid era apart from others, and bring them to the forefront as firms assess how to make longer-term changes.

Of course, nothing went as expected in 2020. Certainly, 2021 is off to an equally unpredictable start. And while unpredictability is bad news for some, every new situation creates new opportunities.