5 Forms of Technology Bringing the Needed Disruption to The Financial Industry
Fintech has almost become a part of our vocabulary – and it soon will, considering how much of an impact it is having on everyday lives of the average consumer of financial services. To break it down, this single word represents the union between the financial markets – and the stakeholders thereof – with technology.
That said, fintech will not be possible if not for certain technology making the disruptions happen. In this piece, we explore some of the tech behind this current bold move, and how they help make the union a smooth one.
When this word is mentioned, many are poised to think of bitcoin. While it is the biggest cryptocurrency in the market by far, blockchain is not a function of bitcoin. In fact, reverse is the case.
The blockchain network makes it possible to not only hold funds in a decentralized system which gives you total management, but it brings anonymity on board too. That makes it possible for undercover journalists, political refugees and other such concerned individuals to exercise freedom over the money without the fear of being found out.
Through the use of robotics, banking institutions and credit unions have experienced accelerated growth. This is thanks to the level of automation which is brought on by automation in the market, helping for faster achievement of certain tasks across board.
Putting things in context, robotics process automation makes it possible to execute tasks based on pre-written programs. Integrated with AI, the system can learn from feedback received to improve on the existent program itself, helping to reduce administrative controls and inputs by more than half.
Besides saving time, it also helps minimize costs in terms of human personnel which would have been dedicated to such tasks in the first place.
Gone are the days when users are willing to tolerate waiting multiple days before a payment got confirmed. All the way from individuals to businesses, instant payment is now a necessity.
This has pushed banks to either work in support with third-party apps and platforms (such as PayPal, WorldRemit, TransferWise, etc.) which offer this solution or develop some themselves.
4 Artificial Intelligence
The world generates some stunning user data every day – and it is just pegged at 2.5 quintillion bytes at the time of this writing. Let that sink in for a moment.
The interesting thing is that this data will only increase from there, and there is no way a team of human specialists can be used to make sense of all that data. That should be no problem, though, given the emergence of Artificial Intelligence (AI).
AI can be employed to consume this data and map out trends/ patterns which showcase targeted consumer behavior. These results are then used to streamline services and create specialized products for consumers.
It also ensures marketing and outreach efforts by the financial industry are better targeted to specific audiences, helping to achieve a better return while contributing value to the consumer at the same time.
5 Preventive Security
There was a time when the breach could only be managed once it has happened, but all that is changing soon. With prescriptive/ preventive security, it becomes easier to leverage AI and other related tech in tracking fraud in real-time, even preventing it from happening in many cases.
It needs no telling that cyber-attacks are the biggest threats to fintech’s dominance and adoption in the consumer market. It, thus, makes sense to bring in advanced analytics and tools which detect potential threats, flag them and nip them in the bud before they become anything serious at all.
While that model is being developed, the users should also be on the lookout. Ensuring best practices, safeguarding unique and secure passwords, encrypting networks on which financial data is accessed and learning about phishing attacks, among others, will provide a stronger firewall against hackers.