May 31, 2021 ●12 min read
What Emerging Technology Means for Financial Services?
Technology has become an inevitable part of our lives. It has influenced all spheres of life by making things convenient. We can’t even imagine our life without technology. It improves the quality and speed of our work and helps us to make the world better to live in. Instant personal loan providers have also greatly benefited from the emerging technology. Artificial intelligence, automation, block chain, etc. have changed the picture of financial services completely.
Financial service is the sector which provides monetary assistance to individuals or corporations etc. Banks and other Non-Banking Financial Companies are the part of financial services. We can say that financial services are the most important part of the economy.
Emerging technology has changed the operation of the money, communication with the customer and the organization to an unimaginable extent. Modern day technology has improved communication, interaction with money, and eased the process of lending and borrowing with minimal errors.
Following are some of the emerging technologies used in financial services:
Hybrid cloud can be explained as a computing environment which is the combination of a private cloud, i.e. a data centre within the premises, and a public cloud. With the combination of both, private and public cloud, data and applications can be shared between them easily.
Being a highly regulated and sensitive market, hybrid cloud has become a necessity for it as it offers the flexibility of the public cloud and security of the private cloud. Use of hybrid cloud brings agility to the financial services, which is the need of the hour. This technology provides real time data integration, in-depth analysis of this data and its customization. With the help of hybrid cloud technology, the financial companies can develop their short term and long term strategies to adapt to the changing financial environment.
A blockchain is a type of database that collects information in blocks. Each block has a certain storage capacity. When a block is filled, it is chained to another block which was filled previously. This way a chain of data is formed which is known as blockchain. We can say that blockchain is the future of financial services as it ensures safe and cost effective transactions. Blockchain technology minimizes human errors and elevates transparency.
Artificial Intelligence (AI) has become an inseparable part of financial services. It has enabled us to make smart machines capable of doing tasks which need human intelligence. AI provides a huge amount of data from the past which helps financial services to take appropriate decisions regarding different financial activities. AI has made data processing easier and less time consuming. With the help of AI routine processes have been made automated and accurate. Some of the uniform work which is done in routine like analysis of transactions, chat with customers, round the clock customer support are done with the help of Artificial Intelligence.
Artificial Intelligence is benefiting large banks and non-banking financial companies, big or small, equally. It has helped in risk management, security, marketing, product delivery etc. Simple algorithms are used to accomplish all sorts of work saving precious hours of humans which can be used in other productive and creative work which can’t be done by machines.
A software technology driven by logic of business and structured inputs, which has the ultimate aim of automating business processes, is known as Robotic Process Automation. When RPA is used, we are using some pre-decided rules designed for dealing with data. RPA regulates workflows, which improves the profitability of the organization, makes it responsive and flexible. Mundane tasks like email response to the customers are done by the RPA. millions of data can be processed in minimum time and relevant information can be extracted quickly. This way employees’ work load is eased which results in employee satisfaction. So, RPA can do quite a big range of predefined actions swiftly without any wastage of time saving time and resources.
When everything has gone digital in modern day life then financial services cannot be untouched. Financial companies have a large number of sensitive customer related data which is vulnerable to cyber attacks. Keeping the security threat in mind, financial companies are working regularly to create such an environment which is free of all types of cyber threats. Cyber security is the top most priority for financial services.
It is evident that emerging technology has a great impact on financial services. It has made the procedures quite simple, swift and safe. It is an ever evolving process. The pandemic has presented us with new challenges and these emerging technologies have helped the financial services to cope with them effectively.