Will the rise of technology in the financial sector overtake the financial field? In this article, we attempt to tackle and give an overview of the current roles Fintech is playing in this field and what it holds for the future.
Financial technology referred to as Fintech in the financial industry refers to a new technology that is aimed at improving and automating the use and delivery of financial services. Operations in this field comprise of a range of enterprises that have embraced new technology to deliver services to both consumers and businesses.
Major emerging issues in this sector include:
- The development of mobile banking
- Budgeting apps
- Robo-advising and Stock trading software.
Fintech is aimed at improving the accessibility of financial procedures to the public and transforming the operations landscape and although it is still young, its impacts are visible. Developments in this industry, however, are creating both opportunities and threats to various sectors in the financial sector.
Dependence on intelligent technologies
Fintech companies mainly use artificial intelligence and machine learning inventions to digitalise transactions. Some of the benefits brought about by these inventions include;
- In AI, risks are handled more smartly. A predictive and proactive model is used instead of the traditional reactive process.
- A decrease in faults is major due to the incorporation of models that use ML.
- Improved data collection and analysis operations.
- Exemplary customer service
- Operational costs are also cut as technologies do a lot of assistance and maintenance services.
As the popularity of Fintech grows, users expect their institutions to adapt and offer them these services.
According to the Gartner report, by mid-2020, chatbots will have interacted with up to 85% of clients of banks and other financial institutions. Elimination of human resources will improve speed and productivity. This is one of the strengths of the fintech over traditional operations as the responses are instant and resolution is with immediate effect. Feedback collected by researchers has shown that customers are satisfied with this method and they hope all institutions will embrace this technology.
Taking a step back, complex transactions often gave us nightmares because of the time the processes take in a financial institution. Fintech is doing away with this nightmares by allowing users to carry out these complex transactions from their phones and widespread financial agents. With evolving regulations, the institutions will also provide a cloud for data storage which is a safe platform for the consumers’ financial data. From the cloud, a consumer can backup data and deal with their data privately since the credentials are different for each user. While observing other general developments, this step will positively impact the financial sector and also improve general performance.
Blockchains and cryptocurrencies
According to statistics, a big opportunity for people in the financial sector is to take up an interest in the line of Blockchain. Fintech has powered blockchain to provide a solid platform with increased transparency. Transactions have also been made cheaper and quicker. This saves time, reduces costs and benefits a customer greatly. Financial institutions use blockchain to quicken asset and money transfers, investments and also payments. Additionally, embracing blockchains means improved security for both consumers and institutions. The blockchains reduce fraud and are keen on audit and regulatory concerns. Customers are known to crave convenience. Their financial institutions also struggle with many risks to create convenience. Blockchains will come in handy as they have been proved to be more secure.
Mobile payment innovations
A cashless society was everyone’s dream back then. Consumers wished their payments would be instant, free and invisible. Fintech has created payment platforms. With improved security features such as the biometric access control, the online mobile payment platform is meeting the needs of customers and becoming reliable. With this in mind, financial institutions are being forced to embrace this technology and meet the needs of their users.
Automation of advisory services
Fintech has developed virtual assistants that are taking the world by storm and posing a mighty threat on traditional financial advisors. This automation has been implemented mainly through live chats. For a consumer, this means an improved experience as it is quicker and done at the comfort of your living room. For financial institutions, this means cost on the employment of agents is cut and saved. AI has gifted the financial sector an ability to pre-record frequently asked questions and address them to clients that may be seeking clarification. The Robotic Automation (RBA) is set to continue to positively impact the institutions and make them more efficient and effective.
Fintech companies are competing with traditional financial institutions and with evolving digital financing expectations, fintech is rapidly becoming capable of magnificent things. This is a threat even to major players in the financial industry. Each of their trends gives consumers an upper hand as they can;
- Access their banking facilities from wherever they are.
- Put all their financial transactions and data in one app that is manageable and trackable.
- Enjoy advanced security measures which bring about peace of mind.
- Receive improved customer care services as the virtual assistants are compared to physical agents.
- Receive money quickly and easily from blockchains.
Delivering what consumers want is an important goal for all business people. One branch of this technology uses human intelligence to carry out risk assessments. As the rate of data collection grows, the number of regulations will also increase. Increased data rates may mean a comprehensive service and stable income. Below is a recent bar graph showing the growth rate of fintech in the industry.
Inventions are mainly fueled by the expectations of the consumers. In this case, therefore, the industry has focused mainly on reliability and good performance. In a nutshell, the impact that Fintech has in the financial industry can not be overemphasized. It is greatly transforming the financial sector and according to study patterns, it is set to overtake top position in financing. Its focus is generally centred at improving services and making it easy for operations to take place. Speedy responses are a part of sales services and have been taken care of. From the article, therefore, we can see the trends of Fintech are set to give consumers an upper hand and as institutions struggle to meet their expectations, they slowly uphold this technology. The financial market has all the necessary circumstances that help the Fintech companies grow and within no time it will overtake the traditional practices.