Tech

How Technology is Changing the Finance Industry

By Staff Reporter , Sep 10, 2020 05:40 PM EDT
(Photo : pixabay)

Embracing technological disruption is essential for any company wanting to remain competitive in today's world, with the financial sector being no different. At the forefront of tech innovation in the financial world, whether they are involved in trading, insurance, or banking, are the "FinTech" companies.

FinTech, short for Financial Technology, are companies working to shape the future of finance by using technology to simplify processes, improve products, enhance the efficiency of transactions, and reduce costs for all parties involved.

Investment world

There are many ways technology has changed the world of investing. It all started with easier access to the markets through online trading. Then, smartphones became more and more powerful, offering a new way to invest and stay connected to the markets on the go. Finally, automated investment solutions were brought to retail investors wanting to save time, to remove emotion from trading, and to take advantage of more trading opportunities.

The creation of the best robo advisors has only been possible thanks to the recent developments in artificial intelligence, big data, and machine learning, which has developed faster and more precise analysis processes, allowing for the development of tailored, automated investment solutions.

Financial transactions

 

While people used to go to the bank to be able to make transfers or check their accounts, online banking (as well as mobile banking) has become a more convenient way to do all of this. Thanks to innovation in the banking industry, customers are now able to exercise a certain degree of autonomy when dealing with financial transactions, as well as other banking-related features.

Decentralized banking

When Bitcoin was launched back in 2009, the underlying blockchain technology was first introduced. Nowadays, this disruptive technology has found applications across the finance industry, not just cryptocurrencies.

The arrival of the blockchain in the banking system has brought a new layer to the independence of clients in the financial transaction process, especially with its ability to instantly verify and securely store financial transactions, in a decentralized, transparent, and permanent way. 

Data management and analysis

Data science, Artificial Intelligence (AI), Machine Learning (ML), and big data analytics services are allowing for more agile, cost-effective, and automated data management processes, enabling companies to save money, increase transparency, deliver a better customer experience and provide more personalized products and services.

Financial fraud

 

Today, technology is increasingly used to detect suspicious activity early. The goal is, of course, to catch anomalies before any damage is done, which means relying on powerful and modern equipment with artificial intelligence and automatic tools to reduce fraud.

Insurance

 

To stay ahead, insurers use technology to redefine their insurance value proposition in order to differentiate themselves from the competition by providing a more tailored approach, as well as to use innovative loss prevention tools.

Technology is now helping insurers better understand their clients and provide the best coverage for them. Insurers rely increasingly on seamless and interconnected interactions and digital solutions, as well as efficient ways to capture, analyze and use data (social networks, chatbots, AI, ML, etc.).

A final word

Apps to support mobile banking, complex investment products to provide more personalized and automated trading solutions, improved technical and IT infrastructures to support data analysis and machine learning, blockchain technology to develop peer-to-peer sharing economy, internet of things, robotics, as well as cybersecurity, are all technology-driven influencers that actors in the financial world need to start using today to be ready for tomorrow's challenges.

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