The impact of digital transformation is making waves across a multitude of industries. From propelling growth to streamlining services, there’s no end to the sheer impact of this wave of modernization. The financial industry is no stranger to this development, with a combination of new business models, FinTech, cryptocurrencies, and data legislation – among other things – contributing to the vast transformation in this sector.
Of course, all these claims are empty without sufficient context. So, keeping this in mind, here are some of the many ways in which digital transformation is impacting the finance industry as we know it.
New experiences with FinTech
FinTechs have entirely revolutionized the way financial institutions work. With spending tracking, automated chatbots, and online budgeting tools, FinTechs are altering the landscape of financial services. FinTechs have a massive benefit over traditional banking institutes in that they are not subjected to the same federal regulations. Because of this reason, they have more freedom to create user experiences that continually make customer’s lives easier. They offer opportunities for crowdsourcing investments and the chance to purchase your car or home entirely via phone! In fact, FinTech is encouraging customers not just to bank, but to reevaluate their financial well-being completely.
AI and Machine Learning
There is no doubt about the fact that the world of AI and machine learning will leave a lasting mark on the financial industry. Financial institutions are using the power of AI to detect fraudulent activities. These technologies are being continually employed by large corporations, pioneered by various FinTech startups and are benefitting the customer experience as well. Microsoft introduced an AI program that can detect fraudulent activity in less than two seconds. Similar technologies are also helping to protect login credentials, mobile banking, and much more! While many consumers tend to think of FinTech as companies that make their financial lives easier, there are also those that seek to make their financial lives safer.
Today, apps are evolving at the speed of light. There was a time when the term ‘mobile wallet’ was unheard of to the average customer. In today’s day and age, mobile wallets have become the rule of the market with most consumers choosing mobile payments rather than traditional cash and checks. Furthermore, today’s consumers want easy-to-use apps, 24×7 services, and as little human contact as possible. Be it a new focus on mobile payments or text-to-save; there will be an increasing focus on bringing even more customer-centric services to the financial industry.
Blockchain is generally associated with Bitcoin and other cryptocurrencies, but it also offers tremendous possibilities for other areas. For one, the ledger system of a blockchain utilizes controls which allow for auditable data. This system does wonders in building trust with users, increasing transparency, and even minimizing human error and risk.
Blockchain will essentially prove to be a huge asset in digital payments, loan processing, escrow services and almost every other area where valuable currency or information needs the utmost security. It can also be used to manage real estate, investments and literally anything of value, with a limited security risk.
Customer servicing is a significant cost for financial institutions with a direct impact on the revenue. To efficiently offset this, financial companies today are using advanced chatbots which provide an easy-to-use mechanism to deal with the simplest queries at a minimal cost. This greatly aids in reducing the burden on customer service and improves operational efficiency since the most basic queries can be taken care of through process automation.
There is little doubt that technology has dramatically impacted the way we think of the world around us. The financial industry has been one of the areas most affected by the digital revolution – and for good! At Clix Capital, we strive to continue using the technologies that make the customer experience as profound as possible! As the technology that guides the finance industry continues to evolve, one thing is certain: more change is on the horizon.