Technology is everywhere in our lives right from the nib of your favorite pen to sophisticated automatic machinery. We live in an era where innovations empower technologies at the speed of light. Innovations are further leading the way for sustainable growth. However, the key challenge here is to have the right set of talent with the necessary skills needed to effectively utilize innovative technology.
Technology has spread its branches among all the fields such as medical services, transportation, entertainment, education, financial services and much more.
In this article, we will focus on the impact of technology on financial services and how new innovations have helped them flourish their business.
Financial services are economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, accounting firms, consumer-finance companies, stock brokerages, investment funds, individual managers and some government-sponsored enterprises.
On one hand where financial services flourish economies, on the other there are certain challenges that prevent it from reaching to its full working powerful potential. Let’s explore these challenges:
Data breaching has become a major cause of concern in the Finance Sector because when the data is vulnerable, your information can be easily misused and manipulated leading to huge losses.
“The rate of data breaching has increased by a staggering 480% from 2017 to 2018.” – Reports of data breaches by RPC
That’s why the need for technology that keeps data safe while preserving the transparency of transactions is apparent. Here’s where Blockchain technology can help us achieving it all while considerably reducing the probability of falling prey to cyber-attacks. So, integrating blockchain with the financial sector will make it more secure and safe.
2. Restoring customer’s trust
When it comes to finances, customers need to trust their service provider whole heartedly. In addition, customer service is a crucial component of sustaining your business in a competitive industry. Regaining the trust of the customer is vital. One of the ways to go about this is to provide them a seamless smartphone banking experience in addition to providing customer support through chatbots and customer service agents.
3. Regulatory Compliance
The ever-changing nature of regulatory compliances has always been a challenge for the financial sector. Regtech has lately been introduced to address this challenge. Fintech companies are exploring an array of new technologies to address the compliance. Regtech offers automated audit, process streamlining, reporting etc.
How technology is integrating with the financial sector?
The global financial sector is overtaking technology to find solutions to their problems not only to survive but to succeed in the era of digital finance. Financial industries are changing day by day. Whether you are a multinational company or a startup it’s high time to revisit your procedures and methods that lead you towards success as old methods have become redundant.
So, here is how technology and finance are becoming intertwined:
- Blockchain: It is transforming banking and financial sectors by decentralizing financial management from the central authority and the transactions are broken down into encrypted blocks this makes the transaction secure from hacks.
- Advanced ATMs: The next revolution in ATM will involve contactless ATMs just like UPI based payment apps, you can transfer money using your smartphone. Some innovations have already been implemented while others are on their way. For instance, biometric authentication has already been implemented, while facial recognition and retina scan have a long way to go. Such innovations can improve the overall security and can keep ATMs safe from hacks.
- Digital Banking: Digital transformation hasn’t just begun in the banking system, but it is catching fire with increased innovations and features of online banking. Banks are showing more interest in investing in digital banking as it provides better customer experience. AI is used in chatbots for quick responses to customer’s queries and can also assist them for better and safe money transactions.
- Smart Wearables: Wearables such as smart watches are becoming the future of banking. According to Samsung Insights, banks are using Bluetooth beacons to push greeting messages to customer’s smart watch as they enter the bank location.
A Deloitte’s report on wearable in banking suggests that smart glasses for bank tellers could process customer banking information for the employee as the employee is simultaneously doing other customer service tasks.
Benefits of Banking Technology
1. Reduced Bank Visits
For every little thing, people had to go their banks earlier, whether it was for checking the balance, transferring money, resolving a customer query or whatever you could think of. Now thanks to smartphone applications, online banking and phone banking services powered by a variety of technologies, customers don’t need to keep visiting their banks.
2. Faster Transactions
Earlier for transferring money you had to prepare a cheque and then deposit it in the bank but now with help of online banking you can directly transfer money to a particular bank account by providing proper bank details from anywhere in the world, it’s easy as clicking on a button.
3. Better customer services
Introduction of chatbots has had a significant impact in improving customer services. Chatbots are programmed chat programs that use AI and provide 24/7 customer service.
4. Fraud Detection
Introducing AI and Blockchain in the banking sector has helped us detect fraud more frequently and accurately. Each transaction is recorded and blockchain helps in fraud detection as it has ability to maintain transparency among all the transactions.
Effective use of technology leads to profitability, and financial institutions are understanding that. Despite strict regulations, the financial sector is keen to adopt the latest technology trends that are compliant, user friendly while at the same time efficient.
If you are looking forward to integrating emerging technology with Financial Services, you have come to the right place. The Cygnet Advantage guarantees you get 100% agile, adaptable and flexible technology solutions for your organization. Contact experts at Cygnet on +1-609-245-0971 or email@example.com today.