02 October, 2018 Technology
In recent years, traditional banking and various activities that were hitherto part of the financial sector have taken a backseat. There are modern and advanced financial technologies (Fintech) that are disrupting the traditional method of banking.
In recent years, traditional banking and various activities that were hitherto part of the financial sector have taken a backseat. There are modern and advanced financial technologies (Fintech) that are disrupting the traditional method of banking. Previously, fintech was seen only in backend operations like managing customer databases and executing transactions but in today’s times, it is the centre point of all banking operations. Given the rate at which newer technologies are emerging it is imperative for banks and financial institutes to adapt to that change.
The main reason for this shift is the penetration of smart phones and mobile networks. It has become much easier for customers to interact with Financial Institutions on a real time basis at the click of a button on his/her phone. The customer behavior has largely evolved where most customers are looking for intuitive and personalized banking services. Customers in today’s time don’t have to stand in long queues and hence the overall banking experience has improved for customers due to these fintechs.
Here’s a list of top 6 technology that is reshaping the banking and financial sector:
1) Machine learning and AI
Every operation in banks from payments to money transfers is being done through online and mobile banking solutions. These banks and financial institutes are under pressure to integrate machine learning and AI to their systems as they can process large amounts of data at high speed. From credit risk analysis to financial reporting to cyber security, machine learning will impact all aspects of banks. In case of cyber security machine, learning can identify unscrupulous behaviour, run automated tasks and help in compliance. With the digital transformation of banks more and more customer data need to be analysed and is not possible to do that manually. Artificial Intelligence is being adopted by banks as it a fast-evolving go-to technology to give better customer service and personalized experiences for individuals.
2) Chatbots for better customer experiences:
Another very popular tool is using AI to create chatbots to streamline customer facing interactions.Chatbots are built on technology that provides an immediate response based on the customer query. They are bits of software that combines the benefits of human help along with virtual assistance. According to a research it is estimated that by 2022 chatbots will save $8 billion every year. It is becoming a very important tool for banks and financial institutes to improve customer satisfaction. Apart from answering customer queries, chatbots help in collecting customer data which will help to provide personalized services to customers. The uses and benefits of chatbots are varying starting from determining the eligibility of customers, to automate payments and manage live transactions.
This technology, that supports cryptocurrencies, is taking the financial industry by storm. The blockchain technology permits various parties to have access to a distributed ledger system at the same time by combining shared databases and cryptography. The most significant role of blockchain is basically reducing so much of the time and cost to transfer money making it very convenient for customers as well as banks. Blockchain also minimizes human errors and risks, ensures transparency and provides a perfect trading platform for security exchanges
4) The Internet of Things (IoT)
Internet of Things has a massive impact on all major industries including banking and financial sector is a big network of humans and connected things which gathers, collects and shares data to solve problems and improves efficiency. It is an interlinking and networking of physical devices, offices, software, actuators and sensors etc to gather and share data. The most prominent value that IOT offers is the sharing of data and the banking industry per se is heavily dependent on data collection and analysis and hence this technology has a huge impact on contemporary banking services.
5) Use of Biometrics to strengthen security
Biometric processes like thumb-prints and facial recognition etc act as an extra layer of security in financial transactions. It is great to identify authenticity and is easier as there is no use of multiple.
Hence, we can see that fintech in today’s time is a mix of everything from machine learning, Artificial Intelligence, Internet of things, chatbots for better customer experience and hence helping the financial institutions to upgrade their day to day operations and provide seamless customer services.