Last year we saw a series of technological breakthroughs in the FinTech sector. These breakthroughs acted like a gateway to many opportunities for FinTech companies. The pandemic helped FinTech companies accelerate their processes to try and implement these technologies. These technologies are also highlighting some problems related to the financial sector. These problems were the driving force behind many financial players investing in improving their functioning, optimizing costs and implementing new solutions.
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Here are 5 technologies that have contributed to the shift from the traditional banking system to a more tech-driven financial system.
- Artificial Intelligence (AI) and Machine Learning (ML) technologies
Before the pandemic, the adoption of AI and ML technologies in the financial industry was slow. But today considering the tough times we are in digital transformation of the FinTech industry is now important more than ever. Modernizing banking systems without disrupting the existing system is extremely important and also a major challenge. Enter, AI and ML technologies.
AI and ML have majorly helped in making digital transformations hassle and risk-free. By implementing AI/ML technologies financial institutions can reduce costs by increasing productivity. Artificial Intelligence and Machine Learning algorithms can spot anomalies and fraudulent information instantly and help achieve improved customer experience.
- Robotic Process Automation (RPA)
Robotic Process Automation technology helps FinTech markets to speed up the procedures by automating the manual interventions. RPA uses software robots (bots) to free up human resources and allows automation of the manual repetitive and mundane tasks. Robotic Process Automation is not dependent on APIs, it notes the user’s actions in a graphical user interface (GUI) to repeat those actions in the same platform. It enables greater work efficiency with minimal investment.
- Blockchain technology
The blockchain technology has taken the financial sector by storm and is responsible for reshaping the financial space. The growing acceptance of blockchain to help create a secure digital ledger is unavoidable. Today, it is the most significant financial innovation for digital transactions. Blockchain technology has a distributed management system. It cannot be controlled by a specific individual, government, company or bank. However, there are still some security issues of this cutting-edge FinTech that need to be worked upon.
- Cloud Computing and Big Data Analytics
Cloud Computing and Big Data Analytics are the next big thing in FinTech. These technologies help in reaching remote markets and audiences. It is a complete transformation. It is obvious that financial services industry has to deal with tonnes of data. Implementation of cloud computing in finance has numerous benefits such as assessment of information, efficient storage and data management.
Cloud computing allows efficient storage of large data sets which results in better data analysis. As the banking and financial sectors further develop and progress with the adoption of mobile technologies and IoT, the need to shift to Cloud Computing and Big Data Analytics technologies will increase.
- The rise of NEO Banking
In 2022, and in the future the meaning of digital banking will not be limited to going paperless or cashless. The financial services industry is moving to towards the next stage of evolution and we are about to witness the rise of digital banking. The first stage of evolution involved a rise in digital payments and online infrastructures. However, the second stage is not just about going online, at this stage we will see the emergence of virtual banks. This is where the rise of Neobank begins. Neobanks are like financial institutions that can potentially give customers a cheaper alternative over the traditional banks.