The financial industry is one of those most disrupted by technology. Banks and other financial institutes have found efficient ways to reach out to more people and making everyone’s life easy. This allowed startups and innovators to come up with more convenient plus efficient inventions.
FinTech startups are assisting in digitalization from traditional banking systems.
In past banks remained reluctant to adopt the technology due to concerns over interoperability, scalability, security, and regulations. But now banks have started to change their perception of technology, and now started to see it as an essential part of their banking system.
At the same time, technology is making banking easy and accessible to everyone and a large customer base consisted of millennials prefer technologically advanced methods. Technology is bound to change the face of the financial industry, and we will look at some of some FinTech trends that are transforming the finance sector.
The most visible way the banking industry uses AI is robots and chatbots. A lot of big companies like JPMorgan and Bank of America use AI to make their customer services more efficient. Another way AI is deployed is to enhance security and prevent fraud. AI is also employed to make customer onboarding and authentication swift and cost-efficient.
AI is also assisting financial institutions with decision making and risk management. It is in fact considered the technology as the foundational stone of other innovations in big data analytics, robotic process automation, and voice interfaces.
Based on the decentralized distributed ledger system, blockchain is the technology that is considered as a fast, secure, and transparent payment method. The experts predict that blockchain will disrupt banking as internet disrupted media. As more financial institutions recognized the potential of blockchain technology to improve security, enhance customer experience, and save money.
Bitcoin, Ethereum, and other cryptocurrencies showed how they could transform the capital markets and pave way for a decentralized global economic system, which is both secure and transparent. Blockchain eliminates the third party in the credit systems and manual data manipulation in banking ledger systems.
To remain competitive and provide the best customer experience possible, many financial institutions are starting to leverage on robotic process automation, since it can save labour, operational costs, and enhance efficiency. The RPA is expected to worth $2.9 billion by 2022. In RPA, the tasks that require intensive manual and repetitive tasks are automated using programmed robots and virtual assistants. RPA can also help businesses to ensure compliance and other regulatory measures. Through RPA, customers can get access to the required information and services within seconds.
On the other hand, chatbot solutions enabled by AI and RPA are deployed to meet customers’ expectations regarding quick and effective response. According to Gartner, by the end of 2020, chatbots are expected to take over 85% of customer support interactions. Bots are also utilized for centralized financial management over multiple channels. This technology is continuously evolving and is empowering customers to interact with their banks on their terms.
The financial sector has been an attractive target for cybercriminals due to the sensitive personal and financial information. Data breaches and other cyber attacks are almost impossible to stop, which is why banks and financial institutions are adopting technologies that could minimize the damage done by data breaches. From mobile apps to web portals, financial institutions are leaning on machine learning and encryption techniques to predict and mitigate cybersecurity threats.
Conclusion
FinTech is enhancing customer experience and helping financial institutions to attain a large customer base. It is also making it easy for people to access financial services. As we are becoming comfortable with technological disruptions, it will continue to enhance.