Technology has altered how financial services companies work. These progressive companies are on the lookout for new technologies to improve their services’ quality and provide a better customer experience. The growth of technology calls forth companies to leverage this technological revolution to transform their business.
While technology is ever unfolding, here are the ways it has transformed the financial industry.
Customer data has always been a huge factor for financial institutions. Banks, lending businesses, and insurance agencies rely on and make decisions based on the available data they have gathered throughout their operation. Banks might look at your historical financial transactions to assess your credit score while insurers might look at your health records before granting you a policy.
As people rely more on their devices, data has become more interconnected and new channels of real-time data emerged. It has enabled businesses to quickly aggregate data in this case if a financial institution requires information from a client, data can be easily transferred digitally. Improved data analytics also helps businesses have a better strategy for making custom-fit products and services for a specific group of customers. It gave way for businesses to cater to diverse individuals, such as housing loans for people who are starting a family or even financial planners for seniors.
With this modernization, not only financial services but also businesses across different industries use this data to support their day-to-day operations and decision-making.
Technology has become an important avenue for the delivery of banking services. Given that banking has increasingly become more competitive, to be able to thrive and grow, banks need to invest in a modern approach to financial services.
One of the hottest trends in banking is digital account opening. This transformed the conventional account opening where a client has to set foot on a branch to open an account. With digital account opening, customers are presented with a straightforward approach to applications they can do remotely. A smooth user experience supported by security features such as biometrics and face recognition will be anticipated in the coming years.
Furthermore, as banks depend on huge amounts of data, they recognize the need to efficiently process and analyze pieces of information. The answer lies within a combination of technologies – machine learning, natural language processing, and robotic process automation. These technologies allow bots to learn and mimic human action and judgment. This will solve and unburden employees with the most repetitive tasks such as report generation, loan processing, and mortgage lending so that they can focus on tasks of higher value for better productivity.
Security and authorization
One key issue of processing transactions digitally is security and authorization. Compared with traditional banking where identification can be done face to face, data transferred electronically can impose risks such as cyber-attacks, phishing, and identity thefts.
To mitigate these risks and to preserve the confidentiality and integrity of digital transactions, a multi-factor security solution should be implemented. These include technologies such as encryption, authentication, and biometrics aside from the traditional password to keep financial data secure. For business owners, it is also important to guarantee maximum security to your clients especially with online payments. Picking the right payment processing partner will provide safety against payment security breaches.
The rise of data analytics allowed financial services to offer an alternative to traditional payment methods. Online payment systems permitted a seamless transfer between banks and merchants.
Since there has been a recent shift to more e-commerce businesses, the demand for digital payment also rises, hence easy payment options are a huge advantage. This online payment enabled online retailers to collect payments from users across different platforms without having to deal with unreasonable chargebacks and fees. This resulted in better payment experiences to customers and ease of tracking to merchants.
Moreover, online payment providers also used technology to understand the behavior of consumers which helped the development of innovative financial services that will help online businesses to increase traffic and sales through consumer analytics.
As digital banking and finance have become more advanced and people are shifting to web or mobile applications to fulfill their financial transactions, a relatively new technology emerges to accelerate digital customer service. Virtual assistants are slowly becoming part of digital banking.
As people familiarize themselves with voice-activated applications such as Siri, Alexa, and Google Assistant in their day-to-day activities, it is more likely that they will use virtual banking assistants too. While this augmentation is still in the testing phase, as artificial intelligence gets more advanced and more data is being accumulated, we could expect in the future that a more sophisticated virtual assistant can be developed. This could bring new tools to customers that can deliver personalized financial insights about their spending habits, tailored products that can fit their financial needs, and even financial advice.