By: Emma Miller
Advancements in technology are the main cause of disruption across various industries these days. Technology brings numerous benefits and various opportunities for businesses. However, adopting and adjusting to new tech can oftentimes be quite challenging.
This is especially true for industries that have managed to resist technology for some time now, such as the financial industry. Systems in place were sufficient enough and there was really no need for technology to step in.
Still, every system becomes obsolete sooner or later and now the industries that managed without technology so far are starting to rely on it more and more each year. Nowadays, technology has made a significant impact on the financial industry, transforming the financial services and banking sectors with the latest fintech solutions and modern trends. With that in mind, here are a few ways how technology is impacting the financial landscape.
Banking went online
If you want to see the impact technology has made on the financial landscape, you don’t have to look beyond modern banking. Traditionally, banking was something that was conducted primarily offline. People would visit their local bank to transfer funds, pay bills or consult with a banker on various things regarding their personal finances. Today, however, visiting a bank in person is becoming quite unnecessary.
People can access their bank accounts through their computers or phones and conduct any activity online that they would normally go to a bank for. Online banking has evolved quite fast in recent years and more people are using it every day. You can still see a few people go to a bank every now and then, but even that occasion is becoming quite rare. After all, with money transfers, online payments and financial information being accessible via a push of a button, there’s really no need to visit a bank unless you absolutely have to.
More efficient processes
Relying on technology has provided numerous advantages to both financial institutions and consumers alike. As an example, consumers in Australia can conduct a quick credit check online without having to resort to a Credit Reporting Bureau like they used to. On the other hand, financial institutions can improve their own systems by using technology that will help them gather and process information, as well as help them improve customer service.
For instance, chatbot features aren’t uncommon in financial institutions. After all, leveraging the latest technology to provide customers with the right kind of service and support is, in fact, vital for business success. In addition, leveraging artificial intelligence (AI) technology has enabled financial institutions to utilize an entirely new level of data analytics and operational efficiency that allows them to not just improve customer service but overall business performance as well.
Faster fraud detection
One of the major concerns every financial institution oftentimes struggles with is fraud. Sooner or later, someone will try to cheat the system and sometimes they’d get away with it. The fraud detection process required a lot of time and resources before technology stepped in. Today, AI’s machine learning, natural language recognition, identification of patterns and processes and deep learning capabilities can make the entire process not just faster, but also more reliable and seamless.
A machine can work much faster than a human can, which has the potential to minimize and mitigate the risks of fraud in the financial systems. AI can analyze numerous factors ranging from consumer behavior to analyzing fraudulent activities to predict and prevent fraud attempts. This sort of improvement provided by the latest technology can help financial institutions improve security, save time and cut costs on crucial financial operations and assessments.
Blockchain technology was introduced to the market with the emergence of Bitcoin, the very first cryptocurrency on the market back in 2009. Digital assets aside, the technology behind cryptocurrencies has been the main focus of fintech developers for some time now. Today, blockchain technology has the potential to revolutionize and completely reshape both financial institutions and the financial industry. Blockchain is a form of distributed ledger technology.
Blockchain can provide numerous advantages to institutions, such as lower the costs, improve the speed of transactions, improve the transparency of transactions, as well as numerous other benefits. Blockchain can also replace traditional corporate databases with a decentralized public ledger. The implementation of blockchain applications will disrupt any financial institution with low transparency and limited traceability. However, the blockchain technology is still being developed and there’s still not a viable solution available for the financial sector, which makes the adoption of this new technology difficult and challenging for many financial institutions.
Technology is very disruptive at first towards industries that haven’t relied on technological solutions before. However, no one can deny the numerous advantages and benefits technology can provide to such industries. Technology may have made a significant impact on the financial landscape, but that impact changed the financial industry for the better.
About the author
Emma Miller is a digital marketer and blogger from Sydney. After getting a marketing degree she started working with Australian startups on business and marketing development. Emma writes for many relevant, industry related online publications and does a job of an Executive Editor at Bizzmark blog and a guest lecturer at Melbourne University. Interested in marketing, startups and latest business trends.