At heart, technological developments brought conversion to the financial services niche. They have proved how it is possible again and again to strengthen the relationship between human beings and financial management tools. Or more precisely, in a digital era, the only limit to the effectivity of the financial services is the technology itself. Every time a new technology is identified, the total sum of the technologies influencing the financial sector at our disposal just keeps growing.
Here are some of the trends that influence the financial service niche
1. The Internet of Things (IoT)
Simply, the IoT is the method that links between a variety of everyday objects enabling them to send and receive data. The data exchange is channeled through a wireless connection in the presence of sensors and software and absence of human intervention. Examples of IoT include smart stoves, smart security systems, smart locks, smart hubs of heating and cooling systems, smoke detectors. Through all these methods it is expected to bring the monitoring of our physical assets and their security to a better level. All that reduces financial and health risks. For instance, the data relevant to the amount of gas, electricity, or water can be automatically calculated and linked to the bank account of the homeowner. Thus, utility bills can be automatically paid. The smoke detector can report data to the insurance company. In case of any fire at home, the consumer does not need to prove the case. The system will help automatically report the case reducing fraud chances. Home improvement, work order, and home equity loan queries will have more solid bases.
2. Digital Banking Platforms
People today are increasing their digital knowledge to harness and convert the current technologies in a way that serves financial and business needs further. In this respect, the availability of efficient and high-quality banking platforms, especially in the financial service sector, has very high growth potential. We experience how IT firms are collaborating with financial institutions to deliver faster, safer, and personalized digital banking platforms. That is all conditioned with the availability of API (application programming interface) linking between the different applications both financial institutions and consumers use. Eventually, there will be more personalized and customer-oriented services and products. Processes become easier, and errors will be reduced changing the way consumers interact with money. Online banking systems, online loaning platforms, financial management platforms, digital wallets are all known examples in this regard.
3. Robots and Artificial Intelligence (AI)
A very good example of the use of artificial intelligence is online robots or chatbots. They are widely used today by financial and other online institutions of all sizes. They can simulate a chat with a user in a natural tone, analyze the human need and propose agile solutions. This all takes place via chat boxes and specific applications that work on computers, mobiles, and telephones. Eventually, all have an impact on the services provided making them smoother, faster, and objective-oriented. Thus, loan processing, debt calculation, bill payment, data sharing, and communication become more efficient.
4. Crypto Assets and Blockchain
Though relatively new technology, the blockchain is expected to rapidly disseminate. It intends to bring a higher security level to the currency exchange market. Every piece of information in the blockchain is recorded, duplicated, and distributed in a network of defined computer systems. To put it another way, the blockchain is a type of distributed ledger technology (DLT). The data is recorded with an immutable cryptographic signature called a hash. Though anonymous, all network participants enjoy the transparency. For example, a Bitcoin Blockchain contains information about the sender, receiver, number of bitcoins to be transferred. Any validated data is irreplaceable making fraud and hacking impossible.
5. Automation in Financial Services
The automation of financial services is another important technology trend. With this technology, it is possible to predefine rules for structuring data, approving payments, updating data, flagging risks increasing the efficiency of the financial processes. This helps auditing, data collection, reducing costs relevant to the usage of manpower and the time desired for a human to process such needs.
Shall We Live With The Influence Of Technology On The Financial System?
The extent to which technology impacts the financial services niche is tremendous. With the advent of the internet, everything around us has been in continuous change. Whether it is a business process, a financial transaction, money management, currency exchange, search for financial institutions and lenders, using credit cards, inquiring about a loan, getting a home equity loan has been directly and tremendously affected by the internet and its technologies. The Global Digital Overview found that 61% of the world’s total population uses the internet today. 92.1% of those users use mobile devices to go online at least some of the time. This is while computers also account for an important share of internet activity. Therefore, the development and dissemination of applications and tools that enhance the interaction of people with emerging financial services will increase. Preventing the growth of technology implementation in our financial systems puts us at a huge security risk that we cannot afford. Therefore, digital transformation in the finance sector will remain a strategic priority.
Author Bio: Robert is an entrepreneur, finance professional, consultant, and passionate writer at Instant Loan Online. For many years using his industry knowledge and experience he has helped his clients to create more wealth and reduce costs.