Breaking Down the Impact of FinTech on Financial Services
8 November 2020
8 November 2020
Fintech is becoming a more familiar term in the financial industry as its presence is increasingly growing. This revolution of fintech is having a huge impact on some industries like banks and financial institutions. These institutions are using technology to improve their business efficiency and streamline business operations.
Fintech was a technology used at the back-end system of financial institutions. Now it comprises consumer-based applications. Fintech has revolutionized the way consumers accessing their finances. Nowadays, customers prefer to go for services that are quick and safe instead of traditional finance services.
Although traditional banks and fintech startups did not go along with each other, better client service, enhanced financial security, more opportunities for individuals, and businesses, along with many others are the reasons behind the partnership between them that we see today.
So, how did fintech change the financial industry?
Big data is the personal record kept in gadget stores. They can reveal the behavioral patterns of existing and potential clients. It helps companies to divide their customers depending on their age, gender, online behavior, economic status, and geographical coordinates, to analyze their spending habits based on those categories.
Along with helping financial companies to keep track of their customers’ spending records, big data allows institutes to learn their customers’ online patterns. So any unusual activities can be easily detected and the bank can contact the user of the account immediately to inform them about the unusual transaction.
Fintech helps financial institutions to build strategies through AI and ML algorithms to build a less risky transaction, make a personalized portfolio, and provide superb client service. Fintech is also developing tools and solutions to help institutions to meet established requirements.
Innovative financial companies understand that they need to give customer friendly solutions. Fintech brings positive changes in private data protection and customer experience. As fintech mostly relies on mobile and web applications, it is more vulnerable to data breaches. Customers are at risk of unauthorized access to their personal financial records, accounts, and digital wallets which are increasing.
Financial institutions can better their cybersecurity by strengthening their firewalls and infrastructure of the application. They can take special measures for their cloud services to detect automated attacks, protect each service separately, and build a strong structure. Potent security will also enhance the customer experience.
One of the most important factors in any service-based business is the customer support system. People want their banks to provide convenient communication and instant assistance. To meet these requirements, companies have come up with various options like chatbots, help centers, etc.
Chatbots are highly efficient in customer query handling and directing them to the right department. Many banks provide support assistance through co-browsing techniques. Support specialists can assist their clients in a way that will seem like they are sitting next to the computer and pointing the direction. It builds a sense of trust among the customers.
Digitalization in the transaction is a blessing for many. Every transaction is available now 24 hours a day, in every environment. These transactions have decreased the error rate, created better transparency, and reduced transaction fees. Innovative approaches in the transaction can bring even more customers to the field of fintech.
The development of fintech is creating opportunities for not only experts in finance but also for the experts of the technology sector. A lot of innovative positions for cybersecurity analysts, product managers, compliance experts, data specialists have been created by this growth of fintech. It encourages the younger generation to choose a career that will be relevant in future years. Many companies are also providing training for their existing staff to improve their tech expertise.