At times, day to day construction work can feel quite shortsighted. There’s often an immediate focus on the here and now including deadlines, budgets, materials, labor and other factors. While these short term goals are important, considerations about the “bigger picture” are often void in today’s construction environment.
That’s the deal with shortsighted thinking, though: It can often lead you to miss potential right in front of your eyes. For that reason, we’ve started looking outside the construction industry for inspiration. If you’ve followed our Construction Role Models series thus far, you know we’ve already searched as far afield as film and fashion, and the hunt is not nearly over.
In the latest installment in our series, we’re looking to business, banking, investment, economics and commerce in general. So what can our friendly finance gurus teach us? Here are six lessons and trends we’ve got our eye on.
1. Increase Emphasis on Cybersecurity
The digital space is not a safe one by nature, and cybersecurity has quickly stepped to the forefront of 21st-century concerns. As Varonis summarizes, “there are over 130 large-scale, targeted breaches in the U.S. per year, and that number is growing by 27% per year” as of 2017, and the “average cost of a malware attack on a company is $2.4 million.” That’s per organization, per attack. For obvious reasons, construction needs to remain as vigilant as any other business or industry.
For even more obvious reasons, finance has taken it upon its figurative shoulders to lead the fight. More financial institutions are looking into increased security like blockchain technology–a linked chain of encrypted transaction records–to protect consumer data. Indeed, this tech is poised to reshape the entire industry.
“Large financial companies and independent financial analysts primarily view blockchain technology in the near future as a possible alternative to the SWIFT bank transfer system,” says Medium author Universa. SWIFT (Society for Worldwide Interbank Financial Telecommunication), which is responsible for facilitating payment transfer between banks across the globe, has proven to be vulnerable to attack. Hence the new approach.
“Blockchain technology provides a high level of safety in storing and transmitting data, open and transparent network infrastructure, decentralization and low cost of operations,” adds the report. “These impressive characteristics make blockchain a really promising and in-demand solution, even in the extremely conservative and restricted bank industry.”
It’s not theoretical, either, but is rather already being implemented: “The British fintech company Billon Group, which received EUR 1 million of investments from the EU last year, created a unique blockchain-based solution for the bureau to process customer data.” Cybersecurity, in other words, is undergoing a revolution, and we could all learn something.
Nonetheless, construction is an industry that is only beginning to wake up to the idea of security. As new technology floods the market, not all construction companies are thinking thoroughly about how secure they are–and they really should be.
When considering technology solutions that will contain their project data, firms should look into platforms that value security certifications and processes. That might take a little research or extra involvement from your internal IT department, but it’s critical for firms that don’t want to suffer the loss of money, time, reputation and new contracts.
2. A Mobile Movement
Today, going Dutch is easier than ever. Dinner out with friends or siblings is no longer a matter of counting dollar bills or splitting the check eight separate ways. Now there’s Venmo, a simple technology that enables the transfer of exact amounts over the ether in seconds. Such technologies aren’t restricted to meals among friends, either. Across countries and sectors, the days of paper checks are coming to a close. In their place, mobile payments are growing and here to stay.
“In fact, ThreatMetrix data shows that 55% of global financial services transactions now originate from a mobile device,” says ThreatMatrix, adding that “mobile is increasingly driving engagement throughout the customer journey.”
While mobile payments might be close to their saturation in banking, mobile growth is only at its starting point in the construction arena. Today, mobile apps are improving collaboration and allowing teams to deliver projects faster and more on-budget, all due to the time savings and the reduction in rework that applications enable. Truly, such apps are building the future, and construction companies would do well also to follow finance’s lead in this department.
3. Social Responsibility
By now it’s relatively old news that, as Hongkiat explains, millennials favor socially responsible corporations that follow values close to their own. In putting more thought and energy into social responsibility, construction sectors might have a chance to solve the labor shortage–or at least put a dent in it.
Then there’s the environment, on which banking and finance take a significant toll. As the Corporate Governance Institute points out, “Just like other business sectors, the business of banking has a direct impact on the environment through consumption of paper, energy, waste management and means of transport used.” Reducing paper, physical transport and untreated waste can all help reduce banking’s role in environmental degradation.
Nevertheless, today, many smaller banks are particularly moving towards more social responsibility–and it’s making real business sense. As an example, according to The Balance, “Sunrise Bank is a family owned bank that strives for financial inclusion for all. Branches are located in the urban core of the Minneapolis-Saint Paul area, and the bank emphasizes serving inner-city communities. On the lending front, businesses are held to financial sustainability goals, as well as demonstrating progress in positive social impact.”
As for construction, it too can afford to focus on more corporate responsibility, particularly in an environmental sense. As a major waste producer and consumer, eco-friendly building is becoming more essential in today’s environment. Companies that choose to adopt these practices will come out on top financially and ethically and have a better chance of attracting exceptional young talent.
4. Optimize Advanced Analytics and Machine Learning
In the financial sector, there is an increased movement towards predictive banking. According to The Financial Brand, “With consumer data that is rich, accessible and financially viable to deploy, financial institutions of all sizes can not only know their customers but also provide advice for the future.”
Construction can also move towards machine learning and advanced AI to improve operations and business decision making in the long term. As with banking, machine learning and better predictive power in construction have a number of benefits, such as:
- Improving the quality of designs
- Reducing errors, rework, and lost time and money
- Creating safer jobsites at the surface, in the air and underground
- Assessing and reducing risk across the project lifecycle
- Extending the total lifecycle of an asset
Employing machine learning and artificial intelligence is not only smart; it will be essential to keeping the construction industry relevant in the future.
5. Open Up Platforms for Integration
Open banking is becoming more popular. While the term might sound like an oxymoron, it’s not. As The Balance explains, the goal is for third-party developers to create better financial systems via application programming interfaces (APIs) that enable the sharing of “financial information electronically, securely, and only under conditions that customers approve of.”
Photo courtesy of Mozo.
“The expansion of open banking also will encourage non-traditional financial firms to collaborate with traditional banks or go solo with the same intention … innovating on behalf of the consumer,” says The Financial Brand. Moreover, adds Forbes, “banks will increasingly look to the growing fintech ecosystem to accelerate innovation and deliver the business banking experiences their customers want.”
Like banking, opening up technology for integration in construction helps teams to build smarter and make the most of the innovation investment to which they’re committing. With the ability to intelligently manage tasks, connect to the cloud, customize notifications, automate administration and more, construction firms that build the right software ecosystem will work more quickly, with greater efficiency, with a higher resulting level of productivity.
6. Alternative Delivery Methods
Digital enables multiple routes to the same destination, and increasingly, those pathways (and even the destinations) are in the cloud. The traditional branch bank model is expensive, after all, for both the banks and the customers who have to travel there to do business. Today, with time as one of the most important currencies, consumers are loudly asking for more digital options.
As a result, many financial organizations have been changing their delivery models: “Some banks are launching digital-only banks to collect deposits, while other financial firms are using digital platforms to provide lending, investing and specialty services,” explains The Financial Brand. “In each instance, the focus is on innovative customer experiences and increased value to the consumer.”
Similarly, construction has been building with traditional delivery models for many years, although that is changing as more project delivery methods become available. The standard design-bid-build has held sway in construction for many years, but is not always cost-conscious and has some drawbacks. Instead, construction should focus on more innovative delivery models like Integrated Project Delivery (IPD) and design-build which both focus on more collaboration, ultimately to increase efficiency and provide more value for the owner.
Following Finance’s Lead to Prepare for the Future of Construction
Banking and the financial sector as a whole are making great strides towards safety, efficacy and responsibility, and we must all make an effort to follow their lead. While such revolutions take time–and disruptive technologies will undoubtedly make their waves here in construction as well–it’s vital we take inspiration from these successful business models and apply it to our industry’s future.
So next time you make a decision about construction technology or any other aspect of the business, ask yourself: WWFD? The answer might just save the day.