Technology and finance are always intertwined. For example, the abacus was invented to make financial calculations more accessible, and today’s supercomputers are used to drive complex economic models. The fintech industry was born out of that merger, and now most financial activity is done on smartphones, enabling more people to access financial services.
Technology has changed the way that the world’s financial system operates. In some cases, it has resulted in the complete transformation of an entire sector, such as the case of mobile investing apps and stockbrokers. The financial technology revolution is continuing, and in the coming years you’ll see more and more entrepreneurs developing innovative new applications for financial services. For more information, please reach out to our technical experts at IT Support Vermont.
In this blog post, we’ll be highlighting eight of these exciting changes.
8 Ways Technology is reshaping the Finance Industry
1. Innovations in the Financial Services Industry
The finance industry is constantly changing, with new technologies and apps taking over. One of the most significant changes is the use of technology in financial services. Apps like Quickenlet and Wealthfront allow users to manage their finances in a more automated manner, and machine learning algorithms that track stock prices automatically are changing the way financial planners do their job.
In addition, more people are using online banking platforms instead of traditional banks. It has led to overall growth in the financial industry. However, with so much change comes risk. As new technologies are introduced, financial technology companies must stay updated on the latest trends and developments to serve their clients best.
2. Shift to Digital Banks
Digital banks are becoming more and more popular among customers. This is because technology plays a significant role in our banking, with users preferring apps and websites over traditional banks.
Due to this shift, the number of bank branches has been declining – which businesses need help to cope with. In addition, there have been reports of digital bank frauds, which poses another challenge for these financial institutions.
Businesses must stay up-to-date with digital banking trends and adopt the same technologies to keep up with their competition. This way, they will be able to serve their customers better and withstand any challenges that may come their way.
3. Open Banking
Financial institutions have traditionally guarded their customer data jealousy to preserve their market position. This is typically an industry-wide process that involves denying potential competitors access to customers’ data and is often associated with banks denying customers themselves full control over their data. With the open banking concept, there has been an increase in data protection laws that have allowed customers to access and move their data as they wish, but also due to the increasing cooperation between traditional banks and fintech companies.
Open banking is estimated to have generated $7.29 billion in 2018 and is expected to reach $43.15 billion by 2026. Open banking allows new financial technology companies to leverage big data and provide better financial services by helping people lower their debt, increase their income, and make more profitable investment decisions.
4. Omni-channel Customer Experience
Technology is changing the way financial institutions interact with their customers. This is through an omnichannel experience, which means customers can access products and services through multiple channels, including the internet, phone, and in-app software.
In addition, it helps to improve customer satisfaction and loyalty by providing a single point of contact across all platforms. Financial institutions can also better monitor customer activity and trends on various channels. It is a big step forward in terms of customer service and overall financial transparency.
5. Automation for Financial Advice
The finance industry is constantly evolving, and technology plays a significant role. By automating financial advice, technologies are making it easier for people to get the help they need. In addition to automation, technologies like AI are helping to identify investment opportunities and advise clients on best practices. Apps like Personal Capital offer users detailed track records of their finances to make better decisions.
In addition, money management tools like Mint help you monitor your spending and budgeting habits in one place. So, whether you’re looking to improve your financial literacy or stay on top of your financial situation, technology can help.
6. Transactions with Blockchain and Cryptocurrencies
Blockchain is one of the essential technologies in the finance industry. Blockchain is a digital ledger that can securely and anonymously record transactions. It has led to a new kind of finance where the traditional banking system is no longer the only option for lenders and borrowers.
Additionally, cryptocurrencies like Bitcoin use blockchain technology to facilitate secure and anonymous transactions. The future of finance looks very promising, and technology is playing an essential role in its development.
7. Customer Service Chatbots
The finance industry is constantly evolving, and technology plays a significant role. One such area of transformation is customer service chatbots. These bots can help reduce customer wait times and improve response time. They can also automate tasks like issuing refunds or responding to common inquiries.
In some cases, customer service chatbots can learn from past interactions and provide better customer support in the future. Overall, customer service chatbots are a great way to improve the finance industry.
8. Contactless and International Payments
Contactless payments are on the rise, and this is due to the many benefits it offers consumers. These include faster transactions, reduced wait times, and more secure payments. In addition, international payments are also becoming more accessible and more convenient with the use of technology.
However, several startups are focusing on developing innovative products that will improve the financial industry in a big way. This sector has much potential for growth, so businesses need to stay ahead of the curve.
In today’s technological world, finance is changing at an unprecedented rate. From innovations in customer service to the use of blockchain and cryptocurrencies for transactions, Technology is playing a significant role in the financial services industry. Keep up with the latest trends and technologies by reading our blog and learning about how technology changes the finance industry.
Post courtesy: Steve Loyer, President, and CEO at Tech Group, LLC.