From the recent past, the impact of technologies on the financial sectors has been absolutely magnificent and gained great success. Businesses are compelled to let go of the old financial practices and follow the innovative approach to stay updated in the competition.
In the year 2020, you will experience many transformational changes with the technology stack in various sectors. Technology oriented innovation in the products and the services will be in full action as businesses will leverage the FinTech to develop all-new business models. As all know that the FinTech market is constantly growing, however, it is very important to closely inspect the financial services’ technology trends and these are mentioned below,
- Cognitive Technology:
- Artificial Intelligence covers every aspect of the financial service business and mostly it happens to be the best use case in the industry. With its high-computing abilities, AI helps the financial business to manage the risks, detect frauds, and even identify the data patterns that candecide with minimal human intervention.
- Apart from that, it is also helpful to customers to customize the financial products, and the services, saving advice, perform budget analysis, and along with that realize the best digital payment and other mobile experiences.
- Conversational Chatbots:
- Chatbots are having their presence since the decade but lost its popularity in the middle years as their inability to deliver the level of human-like experience was not up to the mark. However, with the little upgrade, the AI-chatbots are gaining their popularity again. Financial businesses that offer services are using conventional AI solutions to deliver humanized experiences to the customer.
- AI-chatbots can learn and grow from the existing database and current interaction to deliver the bespoke answers to all the customer’s queries, provide suggestions, and perform beyond the expectation.
- Blockchain acts as the spine of the sharing economy. It is one of the most leading technologies which installs security and accountability into the products and services. This technology lets the transaction happen in a very cost-effective, decentralized, and verified manner. It minimizes the trouble of dependency and book-keeping.
- Blockchain technology is one of the popular financial service technology trends that is standing over the two most important pillars of the industry which is trust and transparency.
- Cloud Computing:
- The financial service provider has reached a certain level today that mobile banking is on high demand and all the insurance transactions are made over the internet and all the customers have started developing their own digital wallet. This technology has helped financial businesses achieve all this easily. Hence digitally backed economy and customers who are offered by smart devices with whom they communicated and can perform transaction 24*7.
- Cloud computing supports mobility in a good manner and helps to maintain the customer’s pace. It stores and enables quick access to the data and offers on-demand availability of the computer resources without direct management by the users.
- The modern era is carrying its own new challenges. Financial businesses have to work with the personal and financial data of the customers which are supposed to be kept under the confidential. As we all know that data is the most vulnerable asset of every customer connected in the ecosystem.
- Financial service providers are the ones investing in the delegation framework such as OAuth2.0 that protects them from third-party attacks and helps to build robust API. Such frameworks and technologies are not only kept data secure but also helps the businesses to comply with the financial regulatory standards.
Now let us understand the impacts of IoT on the Finance Industry.
How IoT Can Change the Finance Industry?
Financial Industry is one of the fastest-growing industries. There is a paradigm shift to mobile devices for executing financial transactions and related operations. Many technologies are contributing to make the financial system robust, scalable, and fast. Technologies such as the Internet of Things (IoT), Blockchain, Artificial Intelligence (AI), Machine Learning (ML), etc. are not only impacting Software development industries but also the financial sectors as well.
According to a research, it is forecasted that global banks IT estimate will elevate to $297 billion by 2021. There are several benefits of integrating the Internet of Things (IoT) in the financial sector. In this article, we go through applications of IoT and how they bring a difference to the way processes and operations are managed in the financial industry.
Applications of the Internet of things (IoT) in the Financial Industry
- Security and authentication
The security and authentication in the financial sector have become quite strong since customers can now log-in to IoT enabled mobile applications, perform transactions, check transaction history, etc. within a few clicks. Blockchain integration with the Internet of Things (IoT) has permitted banks to employ smart contracts to store the sensitive data and credentials of the users which cannot be tampered with.
- Smart ATMs and banking services
With the introduction of IoT, financial institutions can create a more connected environment where every decision is to focus on providing value to their users by using data accumulated by IoT technology. For example, entering the branch details, the details of the customer’s account could be deployed by an IoT-enabled mobile application for real-time devices. Moreover, IoT helps in analyzing data obtained by this technology and financial institutions can strategically place their branches and ATMs according to the tracking patterns keeping the demand and needs of the clients at the core.
- Fraud Detection and prevention
With third-party applications integrating in-app transaction system, a rise is expected in frauds and unauthorized transactions. This has led to the requirement for incorporating IoT technology in the fintech market. IoT is gaining a lot of traction in the financial industry for identifying patterns that inform about fraudulent claims.
- Identifying risks for insurance and loan
Identifying risks and eradicating risks in insurance and loan has always been a manual process which has a tiresome task. With the introduction of IoT in the fintech industry, it has become an easy process. IoT sensors carry crucial data about an individual, which IoT technology-enabled insurance organizations can use for monitoring and analyzing one’s habits and past patterns relating to driving, health, etc. This will enable them to differentiate the customers that can qualify for the insurance based on the data accumulated by the IoT device.
- IoT usage for Unlocking ATM doors during off-hours
Another intriguing implementation of IoT-enabled applications in the financial sector is that financial institutions are using Beacons to permit customers to use their smartphone devices for unlocking ATM doors.
- Enhanced spending visibility
Though several financial mobile apps notify users of tracking their spending and how they can save their money, etc. But with the introduction of IoT, technology can take this process even further. It can assist users in determining their spending patterns monthly and yearly and even break out of them if required. This is very useful on comparing with the bank statements that we obtain every month from the bank which provides only the information of our transactions executed in a month. Real-time data by IoT can help in minimizing and controlling our monthly expenses and thus leads to more money savings.
What about the Future of IoT in the Financial Industry?
IoT technology can be further explored to make robust and scalable interconnected systems that protect against information attacks and fraud. According to aMarket research report, by 2020 IoT technology’s market size in the finance industry is expected to rise to over USD 2 billion. The enormous amount of data collection from current IoT enabled devices is going to become a huge trend in the coming future.
The emerging technologies in the financial sector have scrutinized all the business aspects in the past few years. Old practices are gone, now the processes became more transparent, transactions are secure, and customers are offered with great products and services by Finance Software Companies. All the above-mentioned financial services technology trends including the IoT should enhance their consumer intelligence capability, which can be used to strategize customer-centric growth.
Tuning an always learning and growth mindset, Ayushi Sharma is dexterous communication and marketing professional with years of experience working with Financial Software development companies helping in areas like project management, strategizing digital marketing, business development, software development, product marketing and marketing events.