7 Big Financial Technology Trends for 201910 Apr 2019
Technology has been the silent vine that spread its roots in every sector, disrupting the siloed systems, making its way to the top, eventually, making people adapt to it. It’s no surprise that the financial sector too has adapted to the digital age, levelling up its agility and scalability.
Financial technology has transformed the banking sector, offering it both – opportunities, as well as challenges. The emergence of new competitors that make use of insights and digital technology, coupled with customer behaviour that demands speed of evolution, has paved the way for the future of finance. Today, financial institutions that can leverage new technologies such as big data and advanced analytics can improve their customer experience exponentially.
Let’s get to know a few of such FinTech trends that are threatening the financial sector, while also presenting it with significant opportunities.
Undoubtedly the foremost and the most crucial change that’s taking place is how banks and credit unions now digitize their customer’s journey, adopting new technology in finance industry like it was never done before. FinTech companies are taking charge of the CX process, from the earlier physical interactions to more digital engagements, gaining a significant benefit for banks and credit unions in not just customer satisfaction, but also in revenues and cost reductions.
An enterprise-wide hybrid cloud strategy is becoming the mainstream in banking. Financial institutions are chasing after the ideal and a flexible mix of private, public and IT cloud computing, to cut costs, enhance innovation, improve operational efficiency and address data security, governance and compliance.
Banks and credit unions are not just utilizing cloud-based software-as-a-service (SaaS) for security analysis, KYC verification and the likes, but also for CRM, financial accounting, HR, etc.
Combination of open APIs and open platform banking is providing customers with more options to interact with the banking institution; from the products and services offered, to underlying partnerships, to the delivery channels.
Predictions conclude that blockchain technology by the end of 2020 will bring the number of unbanked people from 1.7 billion to under 1 billion. An increase in mobile banking driven by blockchain implementation will encourage financial inclusion for a large swath of people. This will in turn contribute to a larger movement of money around the globe and open up opportunities to improve the situation of both individuals and businesses alike.
Robotic Process Automation (RPA)
Robotic process automation (RPA) is helping banks and credit unions leverage a range of structured and unstructured data, by learning from prior decisions and data patterns to make independent decisions. Executing pre-programmed rules not only reduces the cost of administrative and regulatory processes, but also simplifies compliance by automatically generating reports, devoid of human error.
Artificial Intelligence (AI)
Capabilities to work with large histories of data, availability of cloud computing and machine learning algorithms, an explosive growth of structured and unstructured data, increased regulation, rising pressures brought by new competition, heightened consumer expectations, and the growing business needs have set the stage for artificial intelligence in financial services for every decision made.
Prescriptive Security and Compliance Systems
Developing future trends in financial services that cut costs and increase business growth also lay the stone for potential sources of cyber threats. While the attack footprint is impossible to end in totality, enhanced security and advanced insights are the differentiator for both compliance and customer trust. Organisations are changing the pattern of cybersecurity, exploiting tools like real-time monitoring, advanced analytics, artificial intelligence, etc. to detect potential threats that might increase instability and stop them before they strike.
Banks and credit unions are redefining themselves to be more responsive to marketplace needs and customer expectations. They are blending in with the driving forces of the financial sector by responding to digitalisation and innovative initiatives that amplify customer-centric perspective, real-time intelligent data integration, and offer an open platform foundation. FinTech companies like KNAB Finance who offer small business loan are already on their way to revamp their operational model to become customer intelligent by offering them both products and services that are technologically driven and give a seamless experience.
It will be undoubtedly interesting to watch companies in the near future add a more diverse and sophisticated view of management to encourage customer interaction through highly advanced technical building blocks.