Technology is making a substantial impact on the business world. Today, it is almost impossible to imagine a single industry not affected by the ways technology is changing and all the programs, apps, and tools that come along with it.
According to the report, nearly 50% of clients exclusively use digital channels for their financial needs. It is only one of many indicators that prove the influence of new tech solutions on financial services. But how exactly is technology changing the financial industry? Keep reading to learn seven major trends in this field.
The Impact of New Technologies on Financial Services
Financial services have changed in a number of ways recently, but we first need to see the technologies responsible for the evolution of banking practices. It’s not the main topic of our post, but it’s important to understand fintech if you want to figure out the major trends.
- Smartphones: The global popularity of smartphone technology allowed almost everyone to gain access to financial services. More than 3.8 billion people use smartphones worldwide, which makes it a universal banking tool of our era.
- Big data: People and companies create a whole lot of information every single day, but most of it would end up worthless without big data. Big data is a combination of structured, semi-structured, and unstructured data collected by organizations that can be mined for information and used for advanced analytics applications.
- Artificial Intelligence: Advanced computer systems can think like humans while processing information thousands of times faster. This makes AI ideal for assisting in all sorts of finance-related operations.
- Blockchain: Although being a relatively new form of technology, blockchain is already making a breakthrough in the financial industry. Jake Gardner, an assignment writer, explains that banks use blockchain for multiple purposes: “The technology improves transfer efficiency, security, KYC requirements, and many more.”
These and many other technologies represent an avant-garde of fintech operations, but what are the practical consequences of new developments in this field? It’s impossible to mention all of them here, but we will point out the seven most important ways technology is changing the financial industry.
The first and by far the biggest influence of technology on financial services comes in the form of availability. Instead of waiting in line to talk to the teller or perform any kind of transaction, you can simply get the job done online.
Everything is available to you at a glance. For instance, mobile banking gives you the chance to control your bank account from wherever you want. At the same time, almost every service you’ll ever need is active and available 24/7. You can do everything from the comfort of your home or travel the world without having to visit traditional banks whatsoever.
2. Financial integration
Financial institutions are known to be extremely competitive, but technology forces them to cooperate and unify certain mechanisms. This is how we get to financial integration, a process in which financial markets in neighboring, regional, or global economies are closely linked together.
What does it mean?
One example of financial integration is information sharing. Namely, the global economy is so intertwined that banks and other financial institutions need to work together in order to reduce fraud, improve services, speed up transactions, and make a number of other improvements on the go.
3. Data storage
Cloud-based data storage is taking the world by storm and financial operators are eager to jump on the bandwagon. Instead of investing in gigantic data storage locations on their own, banks and similar organizations can now take advantage of cloud platforms to transfer information online and keep it safe and sound in the long run.
4. Risk mitigation
A study shows that financial services firms are 300 times more likely to be targeted by a cyberattack than any other company, but big data and blockchain technologies help fintech companies to mitigate risks. How come?
The answer lies in data analytics since modern platforms are able to identify suspicious transactions and pinpoint fraudulent activities. Such platforms automate data analysis and do the job that no human being could ever complete manually.
The system doesn’t prevent every fraudulent activity out there, but it drastically reduces the percentage of successful attempts.
5. Customer service
If you want to hire an essay writer and visit a content creation agency website, you will instantly notice a live chat service available around the clock. The same function is used in the financial industry to simplify the customer experience and provide clients with effortless experiences.
Live chat agents and chatbots are flooding the Internet because almost 70% of consumers prefer to use this service for the speed at which they can communicate with a business. Chatbots can answer almost every business-related question, which makes them a perfect addition to the customer service department.
Chatbots are not only an excellent customer service contributor but also a genuine sales generator. The point is that AI-based chatbots collect user-related information and help sales managers to make data-driven decisions.
It’s a superior customer analytics solution since banks can now personalize offers based on a given client’s needs and interests. There is no room for “one size fits all” solutions anymore – all that matters is to create unique products that correspond with the real-life expectations of each prospect individually.
The last item on our list is cost-optimization. After everything we’ve stated so far, it is evident that chatbots increase the productivity of financial services while decreasing the overall cost of business operations.
For example, chatbots help banks to cut costs simply by hiring fewer human agents. Now that the chatbot can answer the majority of users’ inputs, all it takes is a few agents to answer the most complicated questions. The same logic applies to other fields of business, which gives financial institutions a big cost-optimization boost.
The Bottom Line
Financial institutions rely heavily on modern technologies to ensure better, faster, and more convenient services. Some trends proved to be groundbreaking and so we showed you seven major ways technology is changing the financial industry. Which trend do you believe to be most important here?