FinTech refers to Financial Technology and is currently the fastest-growing segment in the world. Recent decades have witnessed the introduction of technology solutions that accelerated the transformation of customer experience. Moreover, the shock of the great recession agitated the emergence of new technology solutions in self-service, online and mobile banking, and artificial intelligence.
A 2018 Executive survey indicates that some top executives fear that their firms are at risk of displacement from highly agile, data-driven competitors. The fear can also be seen within smaller non-technology-centric firms to tech giants- like Amazon and Google.
Though the growth pace is slower than other industries, financial service providers explore innovation opportunities and adopt the most efficient techniques.
Reasons for change in consumer behavior
The interrelated expansion of mobile internet access has encouraged the growth of FinTech products. A recent study shows how FinTech products are transforming the customer experience/behavior and what are the consequences of emerging and widely used FinTech services. To give you more clarity on the evolution of FinTech, here’s a timeline of payment infrastructure and FinTech solutions.
Let’s start with the reasons for the transformation.
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– Fight for Customers
As the population becomes more mobile, customers become inclined to use technology for banking and insurance. Since financial services and advanced technology are integral to development, organizations tend to lose customers when a technically advanced competitor enters the market.
At this point, organizations dictate the direction of FinTech innovation. Even a small-scale invention can trigger the entire financial sector- thus opening possibilities that never existed before. This happened with the introduction and emergence of blockchain. A similar pattern was also observed with machine learning and big data.
Even the perfect software age, taking a toll on how businesses are conducted in the sector. Using the best-in-class tech, one may secure the company and make it move forward without fearing to age.
How can you improve your existing services through FinTech Solutions?
Technologies like chatbots, biometrics, and blockchain compete with traditional financial methods- leading to the innovation of the financial sector. Let’s see how each of these improves your existing approaches.
Let’s look at some recent examples of FinTech firms that include innovations as a part of their strategy:
- Quantopian – Quant users share a platform where they can develop/share algorithms and trade them later.
- Kensho – An AI engine puts data at the fingertips of non-technical users to bring data science to a wider audience;
- Elsen – A computing engine that takes complex models for traders and processes results within minutes.
Over 45 percent of customers in the U.S. use at least one financial technology service or FinTech app. Money transfers and payments tools are the most frequently used among FinTech consumers, followed by Savings and Investment.
Moving on, let’s look at the various innovative ways you can use FinTech, apart from the ones mentioned above.
Biometrics evolved as a new and crucial step towards security. Users are not required to remember all of their passwords. The technology allows secure authentication with the lesser effort from the customer.
One such example is a mobile solution created by Wells Fargo, a community-based company. The solution helps customers view account balances, make deposits, and approve payments all through mobile devices. It includes a biometric eye print feature, an automated identification that allows users to sign in by recognizing their eye patterns via a phone camera.
Chatbots are apps that simulate human behavior by conducting online conversations via messages. Based on AI, chatbots save tons of money and time by letting your support crew focus on the more challenging issues. It results in better customer retention and satisfaction.
The financial sector benefits from the transparency blockchain offers. Smart contracts written as a protocol within the blockchain network system take contract management to the next level.
An example of this is Banco Santander, a Madrid-based multinational commercial. It implemented smart contracts for digital payments to automate issuing, registering, executing of guarantees from the bank.
d. Big Data
Large financial organizations typically face a huge data turnover. Big data allows a better reaction to identifying untrustworthy payers, a more efficient collection of user data, enabling a more personalized experience for customers. To automate processes and reduce manual work with huge data, an Australian-based bank lender started applying a data deployment platform and minimized manual verifications up to 40%.
In all, financial technology acts as a foundation for innovation and transformation, yet firms must overcome the barriers and roadblocks to widespread business adoption. If you have a FinTech project in mind, don’t hesitate to contact us, we have a proven track record creating fintech solutions for enterprises.