Over the last decade, technology has brought enormous changes in the financial industry. The traditional methods are replaced by modern and more convenient features. Due to the advancements in technology, the world is changing into a global village. The tasks which previously take days and even weeks to complete can now be performed within minutes. As technology is growing day by day, there is a lot to come in the future.
What is Financial Technology (FinTech)?
Financial technology, which is also referred to as FinTech, is a collection of all the technologies that bring improvements and automation to the financial services. FinTech is used to make financial services more beneficial and convenient for customers. With the help of financial technology, advanced financial products or services has changed the life of the people. Apart from the ease and convenience, technology has also made financial services more safe and secure.
With the rapid advancement of technology, some trends will reshape the financial services in the near future.
Financial Technology and Future Trends:
- Artificial Intelligence:
AI, as the next game-changer in every growing industry, is already bringing revolution in the financial sector. Some software which deals with money laundering, compliance, and transaction monitoring has already been interlinked with the AI to facilitate the processing. In the future, AI will transform the financial industry by bringing the revolution in processes like risk assessment, fraud detection, financial advisory services, trading, and finance management.
Automation is another trend that is changing the scope of financial services. Banks are using robotic process automation (RPA) for the tasks that are repeatedly performed by humans. This will enable the tasks to be done quickly, more precisely by eliminating human errors. It will also allow the employees to focus on and perform other tasks more effectively. Initial costs of this software are big but the annual maintenance costs are a bit lower than the employee’s annual wage, which makes it the future of banking.
- Mobile Payments:
Mobile banking and mobile payments are the financial services that are becoming more and more popular with time. These services are widely used even in economically backward areas. The trend of mobile payments is increasing, and due to this, financial institutions are continuously focusing on bringing the advancements to this financial service.
- From Competitors to Partners:
The FinTech companies which are currently competitors are likely to be partners of the financial institutions in the future. The hype and popularity of cryptocurrency is the main reason why financial institutions perceive FinTech companies as disruptors. Other than cryptocurrency, more applications involve technologies like insurance technology and smart contracts. Due to all this, FinTech companies are expected to be partners with traditional financial institutions in the future.
With its introduction, blockchain technology is benefiting the individuals and businesses that were unbanked or underbanked before. With the help of technologies like blockchain, by the end of 2020, their numbers are expected to drop under 1 billion, which is currently 1.7 billion. In this way, the people having difficulties earlier can now avail of the financial services, and ultimately contribute to the global economy.
There is no doubt in it that technology is the future of the financial industry. The technologies like AI and RPA are making the processes easier and safer for the customers. In short, technology is going to change the shape of the industry in the future.