Technology has played a huge part in financial services for some while; larger corporations needing to communicate worldwide, and the way money is moved around and traded requires a huge level of tech to provide the services many now take for granted.
The financial services industry is gradually shedding itself of older tech dating back to the 1970s and investing heavily in new systems. In some ways it has no choice as heavier demands and threats such as cyber crime, a general need for more security, and increased loads on technical infrastructure mean newer tech is a necessity not an option.
The financial tech revolution
Large financial institutions and smaller concerns alike are finding their financial activities governed by tech. Individuals at home can control their bank and other accounts from their desktop or smartphone, and small businesses can run integrated accounting systems from the cloud to cover routine admin and form completion.
For the big players offering worldwide financial services, tech such as AI (Artificial Intelligence) and blockchain is already having a transformative effect.
AI – chatbots and virtual agents
The use of chatbots to liaise with customers is becoming very popular as a way of offering round the clock support and contact, not to mention huge cost savings in staffing.
The evolution of chatbot use is the virtual agent – it takes a things a step further in that AI tech makes it possible to create a bot that can converse more ‘naturally’ compared to the already impressive standards chatbots manage.
This development means customers can receive help on more advanced matters such as loans, savings options and more.
Blockchain
The tech behind cryptocurrencies is beginning to affect financial services.
Its peer-to-peer structure and the fact it isn’t centralized like most data centers means it can respond extremely quickly in recording transactions, and security is strong.
These factors coupled with potentially vastly reduced costs due to not requiring intermediaries (because of the decentralized model) make blockchain a significant tech for financial serves and one that’s likely to grow in importance.
IoT (Internet of Things)
IoT, along with AI, underpins the ‘connectivity’ where devices and machines can talk to each other such as smartphones remotely controlling home heating and security systems.
Amongst other things, IoT can help insurance companies conduct more accurate underwriting by powering tracking devices they give motorists to put in their cars to collect accurate usage data.
Big Data and analytics
Financial companies are able to understand more about their customers thanks to the rise of Big Data and the means to analyze it.
It means assumptions, averaging and guesswork can be eliminated and replaced by hard facts when it comes to learning what customers want and offering it to them. Direct information from the individual customer means organizations can match their services to customer needs far more effectively.
Cyber threats continue
While tech such as blockchain may help reduce security threats, ironically the risk of cyber-crime is still present partly thanks to improved tech – although prevention and cure is improving.
Factors such as the increased use of mobile tech by customers can enhance cyber-crime vulnerabilities, and tech that’s available to financial companies and customers is, of course, available to cyber criminals too.
