This edition of the Capco Journal examines the critical role of balancing innovation and control in technology, with a particular focus on data, AI, and sustainability, as well as wider corporate governance considerations. Contributors to the edition include authors from UniCredit, Bank of Canada, the Office of the Controller of the Currency, IMD and Capco.

Capco Journal #58 Artificial Intelligence examines practical applications of AI across the financial services industry, including GenAI, AI governance and developers 3.0 among other topics. 

Recent events in the U.S. banking sector and broader concerns around instability and contagion within the financial services industry have ensured that the topic of crisis management is once more front of mind for many institutions.

This edition, produced in partnership with King’s Business School, is dedicated to the theme of ESG – environmental, social and governance. The edition draws upon the knowledge and experience of world-class experts from both industry and academia, covering a host of ESG topics and innovations including the value of tracking Return on Sustainability Investment (ROSI) and the importance of moving away from purely external risks to addressing issues that can have positive commercial and societal impacts.

Cloud computing has transformed from an efficiency play to a true growth driver for many financial services organizations. In this edition we examine expectations of cloud and its potential applications through the lens of a joint Capco and Wipro global study, which takes a deeper look at the financial services data collected in Wipro FullStride Cloud Services’ 2021 global survey. The edition also explores digital assets and decentralized finance, including central bank digital currencies and bitcoin’s impact on the environment.

In this edition we explore recent transformative developments in the insurance industry, through Capco’s Global Insurance Survey of consumers in 13 key markets, which highlights that the future of insurance will be personalized, digitalized, and connected. Other important papers cover topics high on global corporate and political agendas, from ESG and climate change to artificial intelligence and regulation.

There has never been a more relevant time to focus on operational resilience which has become an organizational and regulatory priority. This 20th anniversary edition of the Journal offers perspectives from leading academics, senior industry practitioners and global regulators, among other contributors and Capco SMEs.

Transformation has been a constant theme in our industry for several decades, but the events of 2020 have accelerated change in employee working patterns, and indeed, in the very nature of the workplace itself. This edition of the Journal examines three key elements of these new working paradigms – leadership, workforce, and organization.

This edition of the Journal examines important topics in the wealth and asset management industry, from digital disruption and artificial intelligence to currency for retirement and ESG. The edition features papers from a range of world-class experts across industry and academia, including renowned Nobel Laureate, Robert C. Merton, as well as authors from ESMA, Harvard Business School and Capco.

Data is playing a crucial role in informing decision-making to drive financial institutions forward, and organizations are unlocking hidden value through harvesting, analyzing and managing their data. The papers in this edition of the Journal demonstrate a growing emphasis on this field, examining such topics as machine learning and AI, regulatory compliance, program implementation, and strategy.

Alternative business models are rewriting the rules of our industry. This edition of the Journal looks at new digital models and industry leaders who are reaching beyond digital enablement to focus on new emerging technologies to better serve their clients. The Journal features thought leadership from Capco’s own subject matter experts, as well as from renowned academics, senior financial services industry practitioners and regulators, including experts from the European Securities and Markets Authority (ESMA), Bank of Italy, the Citadel and Trinity College Dublin.

Design thinking has become an important management trend. This edition of the Journal focuses on the value of design thinking in our industry and demonstrates how this approach is an essential competitive tool for firms looking to outperform their peers in an increasingly innovation-driven and customer-centric world. Contributors from Mastercard, DBS Bank, Swiss Re Institute and BIS, among other prestigious institutions, have shared their expertise, adding to the wealth of knowledge of Capco’s subject matter experts.

Digitization is transforming every industry and banking is no exception. This edition of the Journal explores how digitization impacts the world of finance, zooming in on the topics of organizational design, cryptocurrency, cyber security and digital identity, to name a few. Authors from MIT, Georgetown University and the Milken Institute as well as the Euronext Group, Saxo Bank and the Euro Banking Association (EBA) contributed to this edition, along with Capco subject matter experts.

Intelligent automation is one of the most prominent trends in financial services, fundamentally redefining the industry landscape as we know it. As the financial services industry accelerates towards a digital universe, advances in data, artificial intelligence and robotic process automation offer much more than purely cost savings.

The financial services industry has undergone numerous transformational changes over the past few decades, from the introduction of derivative contracts to electronic trading and securitized assets. Each transformation has been more profound than its predecessor. However, the industry has never faced the kinds of transformational changes that it is currently undergoing.

Technology plays a dual role in the financial services industry. Within existing institutions, it contributes to overcoming challenges as a powerful enabler of operational efficiency and service innovation. Simultaneously it sets new challenges for those same institutions, by lowering barriers to entry for new and more agile competitors. The most recent new competitor profile is the rapidly proliferating FinTech companies.

The risks facing financial institutions have evolved over the past couple of years. As well as the typical risks that financial services firms face, such as investment, regulatory, operational and economic risks, they are also confronting a genuine existential threat from new entrants that possess a much deeper understanding of how innovative technologies could be used to simplify the lives of clients, and at a fraction of the cost. These players are able to apply new business models to old industries – such as generating revenues from advertisers rather than clients – and are aggressively disruptive. There is no reason to think they will treat our industry differently.