With technology and digitalization advancing rapidly, the financial services industry is undergoing a major transformation.
The impact of technology has been most obvious in finance, as several advances such as robo-advisors or blockchain show us. The transformation is well underway.
Below are some of the emerging technologies in the financial services industry
- Robo-Advisors
Robo-advisors are automated investment managers that help people invest their money online. They use algorithms to analyze market data and suggest an investment portfolio based on their risk profile. Robo-advisors provide investment advisory services comparatively low costs compared to traditional human advisors.
Most financial institutions now offer robo-advisory services.
- Personal Finance Apps
Apps like Mint allow people to manage their finances on the go. They provide easy-to-understand graphs and charts which people can use to track their monthly cash flow, spending, investments. Besides that, they also offer budgeting tools that help in planning future expenditures better.
- Blockchain
Blockchain is a digital ledger in which transactions made in cryptocurrencies are recorded chronologically and publicly. With blockchain, any two parties can directly conduct financial transactions between each other without the need of a third-party intermediary such as a bank or clearinghouse.
- Chatbots
Chatbots are computer programs that can simulate human conversations through instant messaging on social media platforms or live chat apps on websites. They can answer questions, perform tasks, provide services, and engage in discussions with human users. The key advantage of chatbots is that they don’t need to be monitored 24/7, which means they can handle scale with many transactions simultaneously.
- Artificial Intelligence
Artificial intelligence is becoming pervasive in the financial services industry. Intelligent agents or bots powered by AI are used to automate decision-making in many ways, including trading, customer support, credit scoring, and fraud detection.
- Digital Assistants
Digital assistants like Siri, Cortana, and Alexa allow users to interact with machines conversationally by voice or text commands. They can perform tasks such as searching for information on the web, creating reminders, reading email messages, and playing music. Moreover, they can be used to consume financial content such as news and stock quotes and place trades.
- Robotic Process Automation
Robotic process automation is a software technology that helps automate rote tasks such as filling out forms, checking documents for data entry errors, and filing expenses.
In a nutshell, technology will have a major impact on the financial services industry. With many fintech startups entering the market every year, established financial institutions must use technology to differentiate themselves from their competitors.
