Innovations have remained at the forefront of tech disruptions worldwide. As almost every sector has started adopting technological advancements in this pandemic age, the finance sector is no exception! The entire financial sector including insurance companies and banks works diligently to adapt to transformational changes. These changes are based on advancements in emerging technologies.
“Ignoring technological change in a financial system based upon technology is like a mouse starving to death because someone moved their cheese” – Chris Skinner, Fintech Expert and Author of Digital Bank
These advancements have led the BFSI industry to make fundamental changes in the way of accomplishing tasks. Banks and microfinance institutions are in a position to harness the data for making insightful decisions in real-time. Thanks to these advancements, many BFSI organizations successfully collect valuable insights and transform their legacy systems. It’s interesting to see how financial technology will evolve for the BFSI sector over the period.
But, before moving ahead, let’s go through some stats that show the importance of technological advancements in the finance sector (fintech) for the coming years.
Let’s dig deep into the ways through which technologies transform financial organizations.
The biggest benefit of advancing technology is it can give rise to contactless payment options. Apart from the BFSI, eCommerce and retail sectors also get the benefits of advancements of emerging technologies. Digital mobile wallets and other online payment options can increase the convenience of customers while giving them a secure and pleasant experience.
What’s more, AI-powered chatbots can offer the best investment advice while helping them make transactions. Banks and financial institutions can provide all necessary services through customized and user-friendly applications. The concept of digital or virtual banking has gained ground in recent years because of advancing technologies.
Emerging technologies have made digital transactions, online loans, and other facilities more accessible than ever. Customers can execute any financial activity with ease while having access to real-time data securely. What’s more, virtual banks can also eliminate the role of middlemen in various areas including payment collection and application filling.
Open Banking is the next-gen financial technology trend that gains ground swiftly across the world. This revolutionary functionality plays a vital role in shaping the banking and finance sector.
Customers and employees can share information more securely in real-time with this concept. Open Banking offers improved control of financial data using apps with the help of AI and APIs.
Industry experts believe that Open Banking will transform the BFSI sector in the year 2021 and beyond. Also, it facilitates customers to manage their accounts and even budget by enabling them to view their expenses in a centralized way. We will see Open Banking as a useful trend for customers to make improved and informed financial decisions while managing debts.
These days, we have banking services at our fingertips, but it has significantly increased the security risks. The biometric security system is useful for taking the security of online transactions to a new level. It is capable of reshaping the finance sector while offering users the trust that their confidential data is secure and they can transact securely on a 24/7 basis.
Biometric sensors will become contactless in the future and replace touch-based solutions. With this, AR and ML-driven features will identify any suspicious transactions quickly. Finance companies can come up with digital assistants based on AR and ML technologies to detect frauds and assist customers to stay away from fraudulent attempts.
Blockchain technology ensures safe and swift online transactions. Over 40% of banks state that the concept is best for making secure transactions. The good thing is, Blockchain does not need any third party for executing transactions. It assists companies to keep their data secure by eliminating any unauthorized access. Blockchain has the potential to take financial organizations to the next level by minimizing the threats and ensuring end-to-end security of the data.
As a new wave in the world of Banking and Finance, blockchain technology focuses primarily on minimizing online threats and securing transactions. Blockchain eliminates any chances of stealing the data and keeps every information secure.
It is useful for providing end-to-end security to online transactions. Amid increasing instances of cyber crimes and hacking attempts, blockchain technology shows a ray of hope to the finance sector.
AI-powered chatbots can provide interactivity with a humanlike experience on a 24/7 basis. Banks, insurance companies, and financial organizations. Both Artificial Intelligence and Machine Learning technologies can manage core business processes efficiently while providing a personalized experience. Both these futuristic technologies are useful for detecting frauds and complying with anti-money laundering laws.
Along with this, Robotic Process Automation (RPA) can automate Paper or data-intensive complex operations and repetitive tasks. Banks and credit organizations can accelerate their processes while following predefined principles across various structured and unstructured data. Also, RPA can improve consistency in the finance sector by performing step-by-step tasks.
Another major emerging technology trend is IoT (Internet of Things). A robust network of connected devices enables banks and financial institutions to automate certain business processes.
The BFSI sector eyes on automating financial requests handling and transferring ownership of particular assets using the IoT-based applications. Asset management companies can also use IoT technology to manage leased assets.
Government entities, financial service providers, tech companies, and fintech startups are drivers for reshaping the future of the BFSI sector. These organizations embrace advancements of emerging technologies to simplify complexities and meet the expectations of customers.
“At the end of the day, customer-centric fin-tech solutions are going to win.” – Giles Sutherland, Art Critic, Author, Journalist
In a nutshell, the financial sector thrives by leveraging the benefits of technological advancements. A recent report from the World Economic Forum has also highlighted several use cases for the finance sector to nurture a customer-centered environment. We may not be able to forecast what lies ahead in the BFSI domain, but advancements in emerging technologies are ready to put customers on the center stage for years to come.
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