An industry that has seen huge innovations in recent years is the use of technology within the financial world. The new buzzword ‘FinTech’ is becoming common place in the sector and with an ever-evolving corporate and consumer focus, the need to keep up with advancements is seeing more choice and an improved user-experience across the board.
In a report compiled by PwC, 77% of financial institutions will increase internal efforts to innovate, with many businesses embracing the disruptive nature of FinTech. There are key areas that are incorporating technology into financial activities to help develop the customer journey including:
Perhaps the biggest way that FinTech is disrupting the finance and banking sector is through customer service. In the past, a good customer service team was vital for any company involved in finance. Anything that involved the handling of money or financial matters required trained staff to be able to help sort out problems and provide assistance to people.
However, chatbots have rapidly become the norm for customers to interact with. An AI which evolves and gets smarter is something which is good on paper, but in theory, it both lacks a human touch and also renders a lot of people surplus to requirement. Why pay a staff member when a machine will work for less?
Banking was traditionally something that was done in the non-virtual world. People would go into town to their bank to withdraw money, transfer funds from one place to another, and sort out their finances. You’d speak to a helpful staff member and interact with people in a brick and mortar building. However, these kinds of premises are rapidly becoming redundant. Online banking is getting more and more sophisticated on a daily basis – we can transfer money or pay for goods with just the push of a button.
Using sites such as finance.co.uk, we can switch between banks and choose products for our requirements; the list is endless. We live in an age where we can access our bank accounts on phones, computers and tablets. This is the kind of thing that is disrupting the banking sector and is one of the bigger impacts on the industry and consumers.
The investigation and identification of fraud used to be an equal effort from both man and machine. The system would help to track potential fraudulent transactions, but it would be up to the staff who were trained to find fraud to look through all the information and determine if there was fraudulent activity on the account or not.
However, AI is progressing beyond the capacity of the people designing it, and they’re now starting to be able to detect fraud and identify it. The machine can track through the history of the victim, and then calculate and predict the likelihood of fraud based on previous patterns. This can all be done at a much faster speed than a human could, which means that a lot of fraud teams don’t need to be as big as they are, and can instead be cut down to a small handful of individuals.
Overall, these are just a few of the different ways that technology is altering the way that the finance industry works. The primary disruption stems from progress. Progress in any field is usually a form of disruption, because the existing people and technology are rendered obsolete, and need to be upgraded or removed. The human element of the finance industry is really what’s at stake here.
We’ve known for years that technology will progress to the point that it becomes more efficient than the people who made them. And the real problem with this is that there’s a very compelling case for a world based on machines. They’re smarter, faster, less prone to mistakes and much more economically viable.
So when it comes to choosing a way to provide financial services to people, the choice is sadly obvious and many businesses are concerned they will lose out to the innovators in this sector if they do not embrace these developments.
FinTech can be a more effective way to work. The benefits of intuition, improvisation and other things that machines can’t do are outweighed by what they can.
The most significant factor is managing the balance between technology and manual intervention, and how harmonising this will further revolutionise the industry for both businesses and consumers.
Jeh Kumar is a veteran of creating and managing digital content to build relationships for organizations and individuals.