2022 is upon us, and with the new year comes new challenges facing financial institutions and private companies. Among the most evident are adapting to COVID for the third year in a row; accommodating new forms of currency and transaction; and ensuring compliance with not only formal regulations but also customer expectations of sustainability and equality of service. Below is an in-depth look at what three trends that will reign supreme in 2022, and what that means for you and your organization.
1. Privacy and Data Will Be Key.
For the United States specifically, there are two important points to make. First, midterm elections are happening in November, with inauguration for the victors in January 2023. With the potential for a split Congress or split Legislative/Executive branches, those watching regulation and policy should expect a push for successful legislation in the next 12 months. On the other hand, however, trends regarding advanced technology, artificial intelligence, and data privacy are proving to be one of the few topics that have the potential to transcend party lines. Given this, movement on these topics at the federal level might prove easier than expected.
2. Financial Technology and Regulatory Technology will continue to specialize and diverge.
Don’t expect one to be bigger than the other, or more or less important: a truly comprehensive organization will need both to succeed. However, with cross-border e-commerce, personalized technology and finance, and digital currencies and transactions all growing at an incredible rate, all organizations will need both a robust compliance operation, enabled by regtech; and a variety of convenient offerings for clients, which will be enabled by fintech. With this, expect collaboration between competitors to get the job done.
3. ESG will loom large.
To tackle ESG, keep in mind some questions you can ask yourself. For the Environment portion: Is your company operating sustainably, in production, operation, transaction, and distribution? Are you adequately addressing climate change and environmental responsibility? For the Social portion: Are you equitable in your practices? If you are a financial institution, are you tackling financial inclusion at scale? For private companies: are you monitoring your supply chain for trafficking practices and labor violations? And for the Governance: Does your company’s management structure operate in morally? Are you working with other organizations who also operate this way, or is there a risk of working with organizations that do not meet the standard?
This is a lot to think about, these will be consumer expectations in 2022. Consumers who are proving quick to leave organizations they do not perceive to be socially responsible. The way to address this as an organization is to assess your practices. What technologies and solutions are you using to screen for risk at scale? What choices are you making regarding data and its use to fine-tune these practices? Frankly, answering these questions will be the key to ESG success in 2022.
Watch our webinar on Forecasting 2022 Trends here.
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