How are cloud-based and other kinds of modern technology causing a metamorphosis in the fintech sector throughout the global market? The answer lies in the desire for the need for speed, access, and accuracy on the part of financial institutions and their customers. Here are the key areas of change that are already transforming the fintech industry.
Technology that is cloud-based is literally changing the face of the financial world, or the fintech industry itself. While still in process, some estimates are that about one-fifth of all financial transactions in the world are currently conducted on the cloud.
- Security: Cloud-based data storage is able to offer a much greater degree of security than server-based storage solutions. When it comes to financial data, of customers and banks, security is a major component of whether to use a cloud environment or not. In today’s security-conscious environment, where hackers and various types of attackers abound, it’s imperative to use the cloud for data storage in order to maintain a high degree of confidence on the part of customers.
- Self-service: For self-service apps to work properly, banks and other financial institutions need quick, secure access to reams of data, which is much easier to do when using a cloud-based system. The vast majority of modern banking customers expect rapid access to account information and the ability to perform routine transactions. In order to support billions of activities every working day, fintech firms have opted to use the cloud rather than traditional IT storage and security arrangements.
- Data collection: Customers and banks need a data aggregation system like the cloud that can offer instantaneous access to a wide range of files for making budgets, analyzing spending habits, evaluating credit applications, and much more.
Other Factors Changing FinTech
In addition to cloud-based everything, the entire fintech industry is currently in a state of profound transformation based on changes in the way people trade things like stocks, how ATMs operate, the proliferation of wearable devices, the rise of so-called non-banks, robot employees who interact with retail customers, 100 percent automated workflow inside the organizations, digitized banking transactions, and more. Here are the top ways that factors other than cloud-based ones are causing the fintech industry to change:
- Online trading industry: Anyone who uses an online trading platform already has an idea about how quickly things are moving in the banking and brokerage segments of the fintech industry. The trend is clearly to make every financial service a fully online experience as rapidly as possible. No doubt the 2020s will be the decade that witnesses this transformation. In online trading currently, every transaction either is or can be completely automated; rarely is there a need for person to person interaction between traders and brokers, or between traders and bankers.
- Wearable tech: Intelligent watches and other wearables are already in use at several major fintech firms. Some banks have even tested the concept of having tellers who wear smart glasses that recognize customers instantly and process all the needed data for a given transaction. Watches are able to act as full-fledged mobile devices on which anyone can transact a host of transactions, check balances, make inquiries, and do budgeting.
- Super-ATMs: Most major banks and credit unions now feature super-ATMs in their lobbies. When customers arrive, they can interact with the devices, which do much more than a standard ATM. In most cases, customers can do anything at a super-ATM except open a new account or apply for a mortgage loan, that would typically require human contact.
- Robo-employees: It’s rare to encounter a human banking employee when you call with a question. The majority of help calls and queries are dealt with via online chat-bots or through recorded telephone databases to try and answer your questions.
- Automated workflow: Inside the institutions themselves, nearly all levels of workflow are switching to a fully automated system. This means a space that is virtually paperless and one in which all tasks are assigned and tracked via computerized systems.
- Digital/Mobile banking: Nowadays, it’s possible for a retail bank or brokerage customer to set up an account entirely via a device like a smartphone, PC, or laptop computer. After authenticating identity, the only other initial task is transferring funds into the new account, which can be done by wire, in person, or online from another bank or payment app.
Some technology factors are gaining ground faster than others, but the overall trend is for all customer-bank transactions to become automated in the near future.