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Monthly Archives: October 2019

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How is Fintech Disrupting the Finance Industry?

For those who haven’t heard of fintech, it simply refers to the technology that is being used to improve functions and services within the finance industry. This has ranged from the software used by banks to improve the handling of customer accounts to super-fast money transfers and online shopping.

Indeed, whether you call it fintech disruption or improvement, here are of the ways that technology is transforming the finance industry:

 

Customer Service AI Bots

 

Chatbots are one of the most valued programmes in modern technology, particularly for financial companies. Mainly used on websites, these bots can help to handle customer queries that can be found on their website. This means that a customer won’t need to call and use the time of a human assistant to help, which means that employee can focus on trickier customer queries.

Not only does this save money for a company, but your customers have a better overall level of satisfaction as their query is answered quickly and efficiently.

 

AI for Fraud Detection

 

Although we can now access our bank and credit card accounts anywhere thanks to smartphones, that doesn’t mean that we actively check these accounts for fraudulent activity. Which means, without fintech, we won’t see fraud until our money is gone.

Many banks and financial companies are now using AI technology to flag potential fraud as it happens. Meaning both you and your bank are alerted quickly so that you can act fast to lock and re-secure your accounts.

This is not just used for fraud with customers, though, as banks themselves use this AI technology to flag and block attacks from hackers looking to mine sensitive information, which can cost those in the finance industry millions if successful.

 

Stronger Security Through Biometrics

 

As technology advances, passwords are becoming less and less safe for protecting our sensitive data. Particularly when a large majority of us use the same password for multiple websites and accounts. Which is why fintech is working on more secure ways to protect our accounts, by implementing biometrics for security. This includes thumbprints, facial recognition, vocal patterns and irises.

Many banks are rolling out biometrics to help their customers protect their accounts, particularly on smartphones that can be stolen.

 

The Dropping Need for Brick-and-Mortar Banks

 

With more people doing their banking online, through apps and websites, there has been a drop in the demand for banks to open and maintain brick-and-mortar banks. Indeed, many banks are now looking to save money by closing banks in several towns and villages.

This isn’t always met with enthusiasm though, as many rural communities with businesses are unable to conduct all their banking online. This means they will need to travel to get to a physical bank.

While some might call it fintech disruption, there is no denying that advancements in technology are helping customers and companies alike to improve security and streamline processes. Which is particularly important with online shopping and smartphones now being a normal part of society.

How Are Digital Trends Disrupting the Finance Industry?

Although every industry has felt disruption through advances in technology, it is the finance industry that appears to have felt these digital trends the most. With the entire sector needing to develop and move forward with the times.

Here are just some of the ways that the financial sector has changed and developed in recent times:

 

Customer Personalisation 

 

When it comes to banking and financial companies, there is lots of competition. So, to obtain new customers and keep their current customer base happy, these companies are having to place a higher emphasis on personalised services and marketing.

So, to improve the customer experience, these companies are using technology to create apps and the like so that customers are always happy.

This has also seen a rise in the use of AI bots to improve customer experience. Here, many financial companies will add an AI bot to their website, where it can answer common queries for customers. As these are available 24/7, customers can get answers to questions at any time rather than waiting for a phone line to open.

 

Open Banking is Now the Norm

 

While banks have been reluctant to accept open banking, where customers can share their financial information with third parties, the customer demand for open banking is forcing these banks to make it a reality to keep customers happy.

This is particularly popular for allowing customers to use apps that can help them to track and manage their monthly spending habits in order to improve savings and help pay debts. 

 

Established Banks are Creating Their Own Challenger Brands

 

A challenger bank is a small retail bank that aims to compete with the larger banks on the market, such as Monzo. With these banks growing in popularity, many banks are losing their customers to these mobile-only banks.

To help combat this disruption, many major banks like HSBC and RBS are creating their own version of challenger banks, so that they can improve their customer base.

 

Fintech Companies Aren’t a Bad Thing

 

Although new fintech companies are indeed rivalling well-established financial companies. This isn’t necessarily a bad thing. Not only is this encouraging companies to move with the times and improve services for customers, but to do this, many companies are teaming up with new fintech companies to share expertise. Which means the customers get the best of both worlds.

 

Cryptocurrencies are No Longer the Future

 

It seemed like cryptocurrencies like Bitcoin came out of nowhere, totally taking the world by storm. In fact, many of us thought that cryptocurrencies would be the future for us all. That was, until 2018 when the value of these currencies plummeted, bringing into question whether or not these cryptocurrencies had any long-term viability in the financial sector.

That being said, the blockchain technology that was used in cryptocurrencies is still incredibly interesting and useful. So, over the next few years, we may see this technology used in other more exciting ways in the financial sector.

 

Technology is improved every day, which means the financial sector is going to need to constantly evolve to stay relevant. Which means we can expect many notable changes in the years to come.