Apologies, I’m about to drop the F-bomb.

Yes, Festivus is now just around the corner. Prepare the aluminium pole. Festivus is only 91 days away and this marks the time of the airing of grievances, feats of strength and Festivus miracles, as well as the new-year predictions and forecast articles. I feel compelled to kick-off the season myself with a look at what is ahead for the financial sector in 2017.

Before looking forward, it's essential to understand where you are currently. If you want to know what the ‘real' areas of focus were this year you need only follow the money. The IDC reports that the financial services industry spent $114 billion worldwide on mobility, cloud, and big data & analytics (BDA)technologies out of a total worldwide financial services IT spend of $455 billion. That's more than 25% of IT budgets going towards three transformative technologies.

Disruption and innovation have been the hallmarks of this year. We have seen the pace of change increasing as banking and financial firms continued to grapple with how to add value and retain customer loyalty in the face of increasing competition and complexity.

There is no doubt that this will continue for 2017 and here are my top five technology drivers for the year to come.

Bigger, Big Data

Heard it before? Well, yes and no. Twenty-nine million, that's the size, in number of records of the world's first big data project in 1937. At that time, the administration in America was looking to keep track of social security contributions from some 29 million Americans. IBM, with its giant punch-card machines of the time, got the contract.  This ultimately set the foundations for the Big Blue we know now and set in motion the start of automatic record keeping and data analysis on a massive scale.

Today it's clear that big data is growing and financial institutions have woken up to its potential. For the first time since its conception, global internet traffic will surpass 1 zettabyte (1 billion terabytes) in 2016, having risen five-fold in the past five years. We are clicking, emailing, chatting and taking photos or videos more than ever and companies have cottoned on to the fact that data is valuable so they are storing more and more of it.

The emergence of Data Lakes, are the next logical step in most financial organisations' information management journey and we will see this concept expanding in 2017. Data Lakes offer an easier and more flexible alternative than building a data warehouse. These are typically being deployed using one of the many flavours of Hadoop or big data platforms and often get deployed as an ungoverned data store. The advantages of Data Lakes are many, including the ability to load most types of data and to support a huge range of analytical needs. Layering cognitive or artificial intelligence on top of this relatively unstructured data is the next exciting frontier for financial services.

As well as access to new technologies, access to the right skill sets is equally important. Data-scientist demand and supply will move towards equilibrium, allowing advanced techniques to be applied within areas such as banking, fraud and risk, moving closer to real-time analysis and alerting.

The Internet of Things

IoT is another piece of the big data puzzle and an additional level of complexity. Like most sectors, the financial industry is grappling with how to leverage IoT data. For industries such as telco, retail, and manufacturing IoT is already a reality, but for the financial markets, it remains a relatively unsolved puzzle.

In the case of banks, will IoT data be used more for ATM or mobile banking? Areas that are worth exploring over the coming year involve multiple streams of activity in real-time. For example, real-time, multi-channel activities can use IoT data to present the right offer and advice to retail banking customers at the right time. Or perhaps we should think about this in reverse, where financial firms could embed their services into the actual device or other client touch points. 

Heralding The Rise of SkyNet

Artificial intelligence and machine learning will continue to accelerate through platforms such as IBM Watson. Not only will their capabilities continue to rapidly evolve, but, more importantly, so will their accessibility. The opening up of these platforms through a plethora of API's and Micro-Services means they can now be cost-effectively integrated into even simple application development. This technological democratisation will lead to an explosion of use cases in 2017 and provide the power to start solving the IoT and big data puzzle we have already discussed. 

Building Block or Wrecking Ball?

The transformation of the financial services industry is top-of-mind for everyone in the sector and Blockchain might just be the hottest topic in the rapidly-changing world of Fintech. In a recently authored report by the World Economic Forum titled The future of financial infrastructure: An ambitious look at how Blockchain can reshape financial services, they concluded that distributed ledger technology has the potential to "live up to the hype" and reshape financial services by: 

• Driving simplicity and efficiency through establishing new financial services infrastructure and processes.
• Forming the foundation of next-generation financial services infrastructure in conjunction with other existing and emerging technologies.
• Transforming and questioning traditional orthodoxies in today's business models.

It is still early days for Blockchain and its success hinges upon careful collaboration with other emerging technologies, regulators, incumbents and additional stakeholders to be successful. However, no one can ignore what Blockchain represents and 2017 is set to be the start of the Blockchain revolution, driving the transformation and defining the future shape of financial services.

Trickle Down or Take-Down

For financial institutions, big data initiatives still predominantly revolve around improving customer intelligence or experiences, reducing risk, and meeting regulatory objectives. These are all activities large Tier-1 financial firms continue to tackle and this will not change. Down-market, we see mid-tier and smaller firms (brokerage, asset management, regional banks, advisors, etc.) able to more rapidly adopt new and secure data platforms and FinTech ‘plug-ins’ (both cloud and on-premise). These will help them match and leapfrog the architectural complexities that larger institutions must work against. In 2017, we will see this segment of the market moving more rapidly on growth, profitability and strategic technology projects. This increased speed and flexibility has the possibility of unleashing a new wave of disruptive players in 2017.

So there you have it, my top five transformational things to watch out for in 2017. If you would like to learn more, then join the conversation on LinkedIn or visit me on the Certus stand at the COBA event next week in Adelaide.

And if we don't see you there, then have a Merry Festivus!