What is FinTech?
Financial Technology (FinTech) is any technology that helps to automate and improve the way financial transactions and processes are carried out. This year alone, FinTech investments are said to exceed $30 billion, and this will bring about improved financial services at a lower cost to consumers.
Major FinTech Trends for Financial Industry in 2020
One of the most significant fintech trends we will see this year is blockchain. Blockchain is the game-changer that will birth efficient and uber-secure transactions. People will transact without the need for intermediaries and their cut-throat prices.
Blockchain is an essential addition to the financial industry for more secure activities.
Human error has continued to be one of the major reasons for mistakes in the world of finance. Even the most sophisticated traders in the financial markets are prone to making errors; hence, a lot of companies have sought ways to automate most of their financial processes.
With the evolution of fintech operations, mundane and other traditional banking functions will get automated. This will improve the consumer experience and, at the same time, help companies save costs while generating revenue.
Big data and AI — Engineered Hyper-personalisation
Big Data defines the massive quantity of data that is collected by an organisation. These data can be structured, semi-structured, or unstructured and are analysed for information.
Financial institutions can now collect and manage Big Data to get a thorough view of each customer. This will range from their behavior, social browsing history, and so on.
Using the information collected, they can create personalised targeting and offers in real-time across multi-channels to consumers. And leveraging predictive analytics, they can detect fraud and reduce business risks. Engaging customers this way will lead to more retention of clients and increased loyalty.
One of the things we were taught while growing up was to share what we have with people who don’t have. This can be likened to the concept of sharing economy in the financial industry.
Sharing economy is simply an economic model where individuals can invest in, rent, or borrow assets owned by someone else either for a fee or free. However, in the sharing economy, this entire process is done through the internet.
Robotic Process Automation
The usual method of carrying out banking procedures manually in the financial sector isn’t as effective in this digital age. It’s time-consuming, costs more, riddled with errors, and lowers productivity. This is where fintech comes in through Robotic Process Automation.
Robotic process automation refers to the application of specialised software and tools for carrying out rule-based, high-volume, and recurring tasks. This will increase staff accuracy and productivity, leading to excellent business outcomes.
According to dashdevs, financial chatbots save over four minutes of every interaction. This means that when you replace human involvement with tech in business, efficiency and productivity will improve. A report by Gartner confirms this, saying that by 2020, 85% of banks and companies will employ chatbots to interact with customers.
This conversational interface is a tool that customers have come to depend on. They trust it to provide round the clock service, quick response to inquiries, and complaint resolution. This will help to make individualised banking a seamless process. Banks can also get feedback from customers in a quick time.
To thrive, financial institutions will have to adopt the tons of innovative technology available today. Fintech goes a long way to make financial transactions and operations more efficient for customers and financial institutions. It will make things such as taking loans, mortgages, documentation processes, security, and much less complex.
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