At present, Fintech is the buzzword within the banking industry. Ever since the global economic crisis, the financial services industry has seen massive disruption, including new regulatory frameworks, greater transparency, and data protection, and much more.
Simultaneously, fintech businesses continue to grow and diversify at an exceptional rate and encroach on the establishment. Alongside, these changes, there are developing technologies, ranging from blockchain, big data, to artificial intelligence (AI) and digital payments creating a multitude of opportunities.
According to Dan Cohen, Senior Vice President, Global Financial Services and Insurance at Atos, “Banks are at a crossroads. Continuous finTech innovation and new technologies such as blockchain are disrupting the market. While it creates threats, it also opens multiple opportunities for financial services to reinvent themselves and thrive.”
Having said that, future technologies will be more customer-centric and efficient, providing more secure and intelligent solutions. This will help the organisation to be more responsive and competitive to marketplace needs. In this article, we have listed e8 technologies anticipated over the next five years in the financial service industry.
The hybrid cloud is gaining popularity and becoming mainstream in banking as well. With this technology, banks get both the flexibility and benefits of private and public clouds while addressing data security, governance, and compliance. It has various advantages as well, including improved operational efficiency, enhanced innovation, and reduced costs.
Any financial service firms that want to thrive in this digital era must consider embracing Open Banking APIs. Furthermore, Open Banking APIs are valuable assets for the organisations as it enables them to enhance their service offerings, build new digital revenue channels and improve customer engagement.
Robotic Process Automation (RPA)
Robotic Process Automation or RPA refers to the usage of software robots which are slated to complete repetitive and labour-intensive tasks. Ideal for numerous banking applications, RPA can reduce manual workload so that human employees can focus on intricate banking operations work and decision making.
Using Artificial Intelligence in banks can help organisations overcome traditional customer service challenges and bring the power of data analytics to combat fraudulent transactions and improve compliance. Various features like AI Chatbots, digital payment advisors, and others lead to quality service to a broad customer base. This, in turn, increases revenue, reduced costs, and boost in profit.
Lately, cryptocurrencies are taking the banking world by storm by offering users with faster and cheaper ways to transact. Implementing blockchain technology could potentially save banks billions in cash by drastically reducing processing costs. In fact, a lot of banks are trying out blockchain which could be used for money transfers, record keeping, and other back-end functions.
The pressure on banks and insurance companies is at a peak as the digital disruption opens up new opportunities for cybercriminals and cyber attackers for money laundering to violating trade embargos.
Having said that there are advanced analytics, real-time monitoring, and other tools to detect potential threats and stop them before they strike. While the short-term might seems risky, but the long-term prescriptive security may improve its effectiveness.
The buzz around quantum computing isn’t settling down. Quantum computers use the fundamentals of quantum mechanics to speed up complex computation solving. All quantum computation processes are made of one-qubit and two-qubit operations that are the central building blocks of quantum computing.
Notably, Quantum computing could unlock new opportunities for banks in risk assessment and trading, allowing them to make computations much faster.
VR and AR
Virtual Reality and Augmented Reality are being used by many financial institutions to help improve the experience of their customers. Both AR and VR offer customers and employees a rich visualization of data and services through the immersive projection. Many analysts believe that AR and VR could be utilised to give customers autonomy in terms of at-home banking.
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