Tag: Banking and financial services

Business Intelligence in Financial Services is proving to be a game changer.

Business intelligence is a novel technology backed by AI. It is a combination of strategies and processes. Simply put, BI collects, cleans, formats, and analyzes data.

No big deal? Think again!

In a world that is ruled by data, this is a superpower. 

Business intelligence is, in fact, a CFO’s best friend. It enables users to perform a wide range of activities with great ease. Since their advent, BI solutions have played a key role in banking and finance services. Business Intelligence in Financial Services offers priceless tools for risk assessment and cost management plans. They also provide detailed customer insights – a 360-degree view of the customer, which is priceless. So, in our current era, where data is everything, BI has become a valuable asset that offers support in decision-making. 

Let’s discuss this in detail. First, let’s talk about the elusive 360. 

The Need for a 360-View of Customers and Buyers in the Store

This technology is growing in popularity. It has become a well-favored tool among companies worldwide. A recent report predicts growth in the global business market. The predicted price for business intelligence and analytics software applications is $18 billion by 2026.

The concept of a 360-degree view is vital for businesses to function while predicting customer needs. This paves the path for meaningful insights and allows for more personalized interaction. The benefits of this method are listed below.

1. Superior Customer Understanding: The 360-degree view allows business owners to predict customers’ needs, allowing for more personalized interactions and rapport-building.

2. Personalized Marketing: Businesses can understand the customer’s preferences through the customer journey map. This map enables businesses to unravel customers’ thinking and curate marketing strategies, ensuring higher engagement and conversion rates.

3. Improved Customer Service: A 360-view means that the service representatives can access a customer’s entire history. Based on the client’s past behavior patterns, this method provides customizations. This personalization is evident in their interactions with you. In turn, it boosts customer satisfaction.

4. Operational Efficiency: With 360-degree view data collection, businesses can streamline their processes, making operations smoother and more efficient. The 360-degree customer view is a method that has revolutionized customer-service provider interactions. These conversations give clients a unified view of the customer’s journey. They also enable collaboration between different departments.

Why Do You Need a BI Strategy for Your Financial Business?

Technology is rapidly growing, and the amount of data generated in today’s business world is enormous. We create around 2.5 quintillion bytes of data every day!

 Legacy financial processes have started failing. They don’t have the right tools to handle this much data. An efficient business intelligence strategy would be your knight in shining armor. It enables you to measure and evaluate performance. You can also identify competitive advantages and make informed, data-driven decisions. Other reasons why you should install this technology into your financial services include:

1. Better Decision Making

Business Intelligence implements Predictive Analysis to enrich the decision-making process. This derivative of AI can learn encoded data, recognize recurring patterns, and make accurate predictions. This greater visibility into potential outcomes based on past performances is the best tool for a business. Companies with an efficient BI strategy can gain insights on their customer behavior. This arms them with the ability to anticipate trends in the market and adjust business operations accordingly. Subsequently, the company’s risk of losses due to market shifts also drops.

Additionally, Business Intelligence improves communication between departments within the company. Employees can share meaningful insights from various datasets, removing the need to rely on anecdotal evidence. Working together towards a shared goal will boost efficiency and increase profits.

2. Increased Operational Efficiency

With a strong BI strategy, companies can streamline internal processes. They can also analyze employee behavior and performance to uncover hidden talent. Data analytics, a subset of BI, can shed light on how to optimize efficiencies within the organization. Companies with BI systems generally switch from manual, time-consuming labor to automated systems, which makes them more agile and frees up resources.

3. Solid Risk Management

Predictive Analytics and Machine Learning are potent tools for a business owner. These systems can also assess risks while predicting future trends. With these risk insights, companies can avoid making certain investments and commitments. This will help companies reduce losses that could hurt their bottom line if left unchecked.

4. Boosts Customer Retention

Financial business intelligence equips you with the most current information on customers. Banking and finance institutions can keep their marketing and sales teams armed. With BI’s help, your teams can recognize the organization’s most loyal and profitable clients. This information is gold as teams can concentrate their efforts on retaining these customers. They can also gain insight into the kind of customer that they can attract to their business, 

5. Offers Competitive Edge

Due to its long list of perks, the BI strategy has the power to give you a strong competitive edge in the market. It also helps you streamline the best BI solution vendor for your financial business. These services are also integrated with superior features.

6. Reducing Costs

Cost-effectiveness is a quality check for the business intelligence strategy you use. Using predictive analytics and other BI tools, budgeting becomes more precise. Resource allocation is thus streamlined, and opportunities for cost reduction are identified; an efficient BI strategy will oversee training offerings and associated costs as well. This will help you budget and reduce unforeseen spending. 

How Can You Build a Successful BI Strategy for Your Financial Services Business?

A solid BI strategy can improve customer retention, optimize costs, and provide competitive advantages. It is vital for your plans and business goals to align with your Business Intelligence strategy to make it a success. Here are the key steps involved in building an efficient BI strategy:

1. Assess and Define Your BI Ecosystem

Gather all the information you need before embarking on this journey. A sound data plan is vital for your implementation. It should include identifying data sources and visualizing a strategy. Gather relevance from your data sources (clients, projects, sales, marketing, finance, etc.) You can organize them by department, function, or business impact to streamline the process. Visualizing a strategy will encompass discussing the company’s vision with stakeholders. Create an alluring presentation for them with the help of a designer. In your presentation, be sure to highlight the reasons and benefits of a BI strategy.

2. Budgeting

Your immediate next step is to develop an accurate budget. Without planning, the BI strategy implementation process can be expensive and can cause financial strain for the company. Developing a strategy beforehand will prepare you for any unforeseen expenditure.

3. Assemble Your BI Team

Select a group of proficient employees to work as your BI implementation team. Include company stakeholders in the team to keep them in the loop. Your team should include an HR employee, a scheduling officer, one from the union, and a legal assistant. This will be your army, as it were, so ensure you make the right choices. 

4. Choose Your BI Platform

Your business goals are bound to change. Aim to install BI software that provides self-service templates and easy usability for beginners. This step is very important because it will define how your company is affected during and after implementation. Take your time, explore various platforms, and carefully make your pick.

5. Select Your BI Software Partner

This is a delicate journey. Be bold and decisive when you reach this step. Remember that the partner you choose will guide you throughout. Compare different partners to rate their different features. Lastly, combine this with previous reports and review them. Conducting demos is the most effective method for this step.

6. Plan User Training

Imagine if, after all the effort put into implementation, no employee is equipped to handle the aftermath. A true disaster! This is why planning early user training is so important. Once you have decided on a service provider, it’s time to plan your training program. Sometimes, service providers provide video training and live classes. This helps users set up and get familiar with the software. Training will help employees stay updated on insights and learn the best features.

7. Refine Your Data

This is the last stage of preparation to build a successful BI strategy. Refine your data structures and remove waste. The cleanest data possible will yield the best productivity results. The quality of data you enter into Power BI will affect the quality of insights you get, so it’s crucial not to underestimate this step.

How Does Business Intelligence Benefit Financial Services?

A solid BI strategy can improve customer retention, optimize costs, and provide competitive advantages. Here are some top benefits of implementing BI into your financial service strategy:

• Real-time insights: Financial BI can spontaneously access any financial data recorded, allowing for quicker and more informed decision-making.
• Improved reporting: Writing reports is a tedious job that can be automated with financial BI. This frees up employees to take part in analysis and interpretation.
• Cost savings and revenue growth: Financial BI can help businesses recognize areas of incompetence, cut costs, and discover new revenue streams.
• Increased efficiency: Financial BI can automate and streamline financial processes, reducing manual work and avoiding the risk of human error.
• Transparency and collaboration: With financial BI, communication between other departments and finance is reinforced.

How Can Fingent Help in Bringing Business Intelligence to Your Financial Service?

Fingent is known for using cutting-edge technology to ensure the best outcomes for clients. These technologies include machine learning, natural language processing, and more. These can be fashioned into valuable Business Intelligence tools customized for your business.

We can help your financial organization stay ahead of the competition. The software designed for you will ensure that your organization remains resilient regardless of any form of disruptive circumstance. Experts at Fingent empower businesses to maintain momentum with new developments. They also measure the effect of changes on customer requirements. Our custom software development experts at Fingent can help you understand everything you need to know about business intelligence.

Talk to us today. 

Your Financial Service business needs software solutions that fully consider all the individual features of your services.

Why?

The best financial advice must be provided in real-time and should be based on customer behavior. Their services must be original and unique for successful business development. This is what will make you different and will help you stand out from your competition and emerge a winner.

How do you achieve that?

Custom software for financial firms can solve complex challenges of business workflow. With custom software leading the way, the finance industry is seeing a significant shift in multiple areas including customer experience and business operations. 

You see, to stay competitive it is important not to cut corners when dealing with customers. To win a customer and retain his financial services, you need versatile capabilities that will help you stay customer-centric despite the rigid nature of the industry.

A financial custom software application can help financial services match customers’ high expectations while managing the company’s unique needs. They offer simplified transactions between people and enable financial institutions to create a wider customer base. 

In this article, you will find out how you can deliver services that separate you from your competition. 

Read more: Digital Transformation in Financial Services: All You Need to Know!

What Is Custom Software and Why Do You Need It Now?

Unlike off-the-shelf solutions, custom software is designed and developed exclusively for each customer’s tasks and requests. The custom software solution can be designed to handle the roadblocks specific to you. Given that, you can choose to eliminate features that your business does not need.

1. Custom software is built around your business landscape

Off-the-shelf applications are rigid and do not allow you to adapt quickly when market dynamics change. Whereas custom software can be responsive to your customer base and market advancements. 

2. Ensures robust data protection

The foundation of financial services is based on trust as it deals with private and sensitive data that demand robust protection. Custom software gives you control over the level of security you need to keep your customer’s data and your reputation uncompromised. 

Trust is a fragile thing in the finance industry. A small mistake or a performance issue can drive your clients away from you to your competition. Essentially, one mistake due to data vulnerabilities can cost your company and your customer millions. 

There are hordes of hackers looking for opportunities to steal financial data. Custom software ensures your security requirements are adjusted to keep your customers’ data secure. 

While keeping your customers’ data secure is of paramount importance, those measures should not jeopardize customer engagement. This balance can be achieved through custom software development as it allows you to create an engaging digital tool that also helps keep your data safe. 

3. Competitive advantage

Custom software is dedicated to achieving the results that you want. So, it is a strategic initiative and investment that allows you to align with your business. When you custom-build your software with a futuristic outlook, your business can outperform your competitors in the long run. 

4. Address errors in real-time

When customers encounter a bug while making a transaction, they will expect an immediate resolution. Custom software allows your team to provide a quick response without depending on scheduled maintenance. 

5. Scale up as required

The market is always in flux with changing customer demands. Responding quickly to those changes is only possible if the software is flexible and agile. Custom software can be built with the ability to scale as and when required. It allows you to add new features and integrate 3rd party services that enhance your app’s performance. The ability to scale as required can support rapid business growth.

6. Seamless customer experience

Today’s customers expect convenience, speed, and seamless experience across multiple touchpoints. Custom software can make it easy for your organization to intelligently and adequately handle any business challenge.

To become customer-centric, financial services need to integrate digital capabilities to keep up with market dynamics. It provides the technological backbone that can adapt to your organization’s growth. 

Custom software is personalized to meet customers’ business needs. With a simplified business process, and operations your customers will find it easy to use. As a result, tailored software always scores high on the customer satisfaction front. 

Read more: FinTech: Safeguarding Customer Interest In The Post Pandemic World.

7. Technologies under control

Preconfigured software does not offer much control over the choice of technologies. But custom software can make any technology more competent, sustainable, and efficient. You can tailor it to meet your expectations and deploy it into your existing business process. 

8. Exclusively yours

Each finance service is unique, and fulfilling the unique needs of the business is only possible with tailored software. This makes customized software a requirement and not an option. 

It will work exactly the way you want it to work. Instead of you adjusting your business process according to the software, custom software fits right into your business process to help you achieve your business goals. 

9. Optimized cost control

As mentioned earlier, customized software allows you to choose preferred features and functionalities based on your business priorities. 

You are at liberty to opt-out of a particular functionality if you feel it is irrelevant to your business. So, you pay only for the features and functionalities that you need. This can considerably save your technology investment costs. 

10. Real-time reporting

Finance services rely heavily on reporting. You may have to spend hours digging your way through a number of excel sheets and other files. Customizing your software can spare you that pain and save you time as it can give you a summarized report.

Read more: Business Intelligence in Financial Services

11. Compatible with your existing process 

You may have been using many useful tools and technologies. Creating custom software does not mean you have to revamp your entire business process. 

Conversely, since the custom development process involves consideration of the various tools that you already have, the software can be built to be compatible with your existing process.  

12. Reduced risk factor

With off-the-shelf software, your business will be highly affected if you decide not to maintain your application, or your business goes bankrupt. During such dire circumstances, you will have to either change your business process or find another vendor to develop another software. 

This can mean extra expense on your business investments. On the contrary custom software can be maintained as long as you need it to be maintained.

13. Relieves you from constant concern

Each business has its own concerns. When a custom software does its work perfectly and serves its purpose optimally, you will be relieved to focus on your core job instead of spending enormous amounts of time finding solutions to your routine business concerns.

An Essential Boost for Your Business

Custom software is the right decision for your business and within your budget. It works more efficiently and can provide your business model with the much-needed lift. 

So, take time to analyze the needs of your business and choose the right software for your business.

Give us a call and let’s discuss what that is for you.  

The pandemic is now the biggest and most critical challenge of traditional banking. Some of these challenges are revenue pressure, data security, customer service management, data collection and analysis, risk management, and so on. These are the warning lights and alarm bells that call for caution over emerging risks. AI (Artificial Intelligence) has gained recognition as an effective solution.

AI is empowering the banking industry to provide individualized frictionless customer experiences. It is driving customer loyalty and profitability by automating banking processes.

In this article, we will discuss how AI can resolve banking challenges. We will also discuss some of the common challenges banks might encounter in implementing AI and how a tech partner can help deploy AI better.

How AI Can Resolve Banking Challenges?

AI is the new electricity – Andrew Ng.

Modern technology such as AI can be tailored to the specific needs of the banking sector. The digital age is opening up new opportunities. According to a Business Insider research report, banks are expected to save an estimated $447 billion by 2023 with the help of AI applications. Given that, here is how AI can resolve some challenges.

Read more: Digital Transformation in Financial Services: All You Need to Know

1. AI-enabled conversational interfaces

Chatbots are one of the most popular cases of applying AI in banking. Bots are programmed to communicate with thousands of customers with minimum expense. Insider Intelligence estimates that the adoption of chatbots could save the banking sector $11 billion annually by 2023.

Mobile banking has become the most popular and chatbot services attract users’ attention and create a unique brand identity. AI functionality in mobile apps is helping banks generate more revenue than when customers visit their branches. Banking organizations that leverage AI improve their quality of services and remain competitive despite the crisis.

2. AI-enabled data collection and analysis 

Banks generate an enormous amount of data every day. Collecting and recording this data is an overwhelming task for employees. Besides, all this work may be a wasted effort if there is no proper plan to use this data. Hence banks need to determine the relationship between the collected data. That is another major challenge.

AI-based apps improve the user experience by collecting and analyzing data. The collected data then can be used to grant loans or fraud detection.

3. AI-enabled Risk management

Providing loans is a challenging task for bankers. Extension of credit to a fraudster can get the bank into difficulties. Or a borrowers’ economic downturn can adversely affect the bank. 2020 statistics show that credit card delinquencies in the US alone rose by 1.4% in a duration of six months.

AI-enabled systems can appraise a customer’s credit history more accurately. Additionally, AI-powered mobile banking apps track financial transactions and analyze user data to help banks anticipate the risks associated with the extension of credit.

4. AI-powered data security

Credit card fraud is on the rise. It is the most common type of personal data theft. AI-powered systems can analyze customer behavior, location, and financial habits. So, if it detects any unusual activity, it triggers a security mechanism immediately.

Read more: Artificial Intelligence and Machine Learning: The Cyber Security Heroes Of FinTech

When all these challenges are successfully tackled, how does the AI-powered bank look like? Read on to find out.

How Does The AI-First Bank Look Like?

AI-bank rises to meet customers’ expectations and remain competitive. The AI-powered bank will offer intelligent and personalized propositions and experiences as it understands customers’ past behavior. It can span across multiple devices providing a consistent experience to its customers.

What Are The Common Challenges Banks Might Face In Implementing AI?

Implementing AI technology in banking is not always easy.  You need to ensure you have the right team and expertise. You will also need access to data, resources to invest in the project, and parties that are willing to adopt the new technology.

• Access to data: It is one of the biggest challenges to implementing AI. Additionally, banks might face challenges with training data. It becomes hard to update or improve the AI models if the team does not have the necessary information to use and learn from.

• Localization: Localization is critical to the banking sector as they often need to design models with multiple markets that they serve. Localization can help you properly customize the customer experience. Your data partner can support you with localization as they have skilled linguists to develop aspects such as style guides and voice persona.

• Security and compliance: It is quite challenging to keep all the data confidential and secure. The right data partner can offer a variety of security options. They have security standards to ensure your customers’ data is securely handled.  Look for data partners who have strong data protection with certifications and regulations. They will be able to provide secure annotation. They will also provide onsite service options, private cloud deployment, on-premise deployment, and so on.

• Trust, transparency, and explainability: AI models can only be successful if they can be understood and trusted by customers as they will want to be sure that their personal information is handled and stored securely. Talk to your partner and ask them to explain the model to you. Or you can always go back to the training data that was used to develop the model and extract some explainability.

• Data pipelines: Connecting data pipeline components to use siloed data is not as easy as it seems. To do this effectively, banking institutions must ensure their data is collected and structured correctly. They must also ensure that this information enables ML models to predict according to the business goals. Look for a partner with extensive security offering as their expertise will enable your banking service company to be successful and scale.

Read more: The New Untapped Opportunities for FinTech Companies in the Coming Years

How A Tech Partner Like Fingent Help Deploy AI Better?

Implementing AI into banking is a serious responsibility. It takes in-depth knowledge, an enormous amount of time, and dedication to accuracy. That is what Fingent has. We do not just follow the trends. Instead, we focus on how AI can add value to your particular banking needs.

Fingent top custom software development company, can bring transparency and explainability of AI automated decision making to your banking processes. We can provide an easy-to-use interface through APIs delivered either on-premise, in the cloud, or as a SaaS offering.

By embedding AI and ML into our products, we can accelerate the release of explainable business models that will underpin new AI use cases. These can help create a seamless customer journey and automate manual processes with self-learning capabilities. We are confident that we can help you deploy AI better. Give us a call and let’s get talking.

How does legacy cloud migration ensure business continuity in FinTech? Explore in this article. 

Did everyone have Business Continuity Plans in place and protocols to follow during the pandemic? Yes, definitely. Did anyone expect a disaster of magnitude like this? Not in their wildest dreams or gloomiest forecasts! The pandemic forced hundreds of millions of employees to shelter in place, essentially moving all operations online. Not all organizations were equipped with the needed technological tools, and most businesses were caught off-guard. FinTech companies were not immune to the aftermath. 

For example, pre-COVID-19, it is true that a few FinTech organizations began migrating to Cloud. But, conversely, there were many who hesitated to embrace the cloud migration strategy because of legitimate concerns over critical factors such as rising costs, managing complex business data and workloads, re-training existing IT staff, and more. 

The pandemic was a wake-up call that helped businesses identify legacy cloud migration as a relevant and vital choice. Though most companies have realized that modernizing old, outdated business applications can boost productivity and increase efficiency; some are still hesitant about their cloud migration strategy.

Read more: 11 Practices Followed by Leaders to Build Resilience and Ensure Rapid Business Recovery

This blog explains why FinTech organizations must consider legacy cloud migration seriously and what are some specific benefits of cloud migration strategy.

What is legacy cloud migration?

Legacy cloud migration involves moving on-premise applications, outdated software, or programs that a company has relied upon for years. These applications may include everything from sales or CRM applications to industry-specific applications. Some FinTech organizations may be reluctant to migrate to cloud just because legacy cloud migration is a daunting project. However, maintaining a status quo can be detrimental to your business growth. 

Read more: Why modernize your legacy systems? What’s the best approach to legacy systems modernization?

Legacy cloud migration is the only light at the end of the tunnel 

The pandemic has triggered a significant reexamination of FinTech businesses and their IT priorities. Gartner predicts that “by 2022 cloud shift across key enterprises IT markets will increase to 28%.” This era of economic uncertainty caused by the pandemic affected all businesses, especially, FinTech organizations. A report from Yellowbrick showed that 84.3% say cloud computing is more important than workplace disruption.

Thankfully, cloud migration strategy was available when it was most needed – a phase when maintaining business continuity has become a priority. Consider the most important reasons for legacy cloud migration.

Why FinTech Companies Should Embrace Legacy Cloud Migration

1. People matter more than premises

As the pandemic hit the world with one wave after another with no time to catch a breath, there was a dire need for remote self-service technology. The massive role played by people working from home is a clear indication that people matter more than premises. A year ago, cloud migration strategy was considered discretionary. Today, work from home has made cloud migration mandatory.

Read more: Why It’s Time to Embrace Cloud and Mobility Trends To Recession-Proof Your Business?

Hence, now is the time for FinTech organizations to plan for their business continuity to remain adept for future upheavals, disruptions, or even disasters. When your organization migrates to cloud, you ensure your teams’ effectiveness while working remotely.

2. Prepare for the next 

Though the pandemic is wreaking havoc, it will recede in due time. However, what remains is a possibility of a similar recurrence of disruption in the future. Hence, FinTech organizations must prepare for future disruption by recognizing that the calamity to come may not be another pandemic but its functional equivalent. Legacy cloud migration will equip you to face any future disruptions and remain resilient. 

3. Facilitate real-time payments

Banks are well aware of the advantages of real-time payments. The race is on for upgrades and integrations that allow organizations to leverage real-time payments. A survey of over 500 executives indicated that 71.9% are ‘extremely interested’ in such payment capabilities. Above all, cloud brings in scalability and agility to real-time payments. Cloud migration strategy can improve the speed and consistency of transactions. Besides, it can enable fast and frictionless transactions.

Legacy cloud migration allows banks to adopt digital payments. Banks can address many of their traditional payment pain points, such as spikes in demand. 

Collaborating between payment players and cloud service providers can help your organization provide a more secure digital experience for your customers. This is of paramount importance in a world where contactless interaction is the key. According to a McKinsey survey, banks that adopt digital transformation were able to increase customer satisfaction by 15-20%, reduce cost by 20-40%, and boost conversion rates and growth by 20%.

While consumer expectations and payment preferences continue to evolve rapidly, cloud migration strategy will help FinTech industries to stay relevant and continue to grow.

Read more: Safeguarding IT Infrastructure From Cyber Attacks – Best Practices

4. Scalability and flexibility for an uncertain future

FinTech firms need an infrastructure that can grow with them and protect their business from future disruptions. Migrating to a cloud platform equips FinTech firms to adapt to branch closures while extending banking services to as many people as possible. Legacy cloud migration provides the agility to scale with speed while saving on on-premise infrastructure that is comparatively expensive to maintain and upgrade. Moreover, it can provide your organization the needed accessibility, flexibility, and scalability during economic downturns. 

5. Manage risks and compliance

Efficiency, automation, and cloud-based delivery will be critical for compliance operations. It is vital to use next-generation technology and emerging digital approaches to optimize risk modeling. Since legacy cloud migration is agile, flexible, and low cost, it can solve many challenges in operational risk and financial crime compliance activities. Additionally, solutions deployed in the cloud can assist with operational challenges. 

6. Data management 

Acquiring large quantities of accurate data is a top priority for all FinTech firms. Their success depends on all the information they must collect, from onboarding to analyzing their spending habits. Cloud migration strategy enables your firm to gather and store data securely while allowing your designated employees to access it from anywhere when required.

Read more: Cloud Migration Strategy: 7 Steps to Accomplish a Flawless Transition

The FinTech industry is at a crossroads now. How it responds to the current crisis will determine its future. The key to the survival of FinTech companies will be the rapid digitization of their business and the adoption of cloud migration strategy. Migrating to the cloud is as important as the historic move from typewriter to computer. Cloud migration has become a global force for business growth. It can reduce overhead costs and help your team focus on increasing productivity and performance.

Cloud migration strategy will become inevitable as the FinTech industry builds a more accessible financial world. By partnering with a cloud migration services provider like Fingent, you will be able to quickly and seamlessly migrate to the cloud without disrupting your business. We also help you build FinTech applications and platforms leveraging the latest technology in the market. So, give us a call, and let’s get talking. 

Smart Contracts to Streamline KYC: A Big Leap in FinTech 

The advent of online transactions has brought in improved convenience, speed, and cost advantages across various aspects of our lives. KYC processes, online shopping, insurance premium payments, internet banking, and a host of financial functions have witnessed a drastic transformation with the adoption of FinTech solutions. 

Read more: Technology in Finance: What to look out for in 2021?

However, these digital advancements have also taught us that a person’s online identity is not always what it appears to be. Identity theft, phishing schemes, and money laundering are just a few examples of digital scams that have wreaked havoc in the finance sector. Shockingly, a report by PwC stated that “in 2020, the average US organization experienced six incidents of fraud in the last 24 months and customer fraud ranks first among them.” The total loss suffered by the US companies from the frauds is close to $6.5B (over the past two years). 

As many of us know, the KYC (know-your-customer) process was designed to eliminate the risk of customer fraud. Various companies use KYC to verify their customers’ credentials with the ultimate aim to confirm that they are not fraudulent or engaged in any criminal activity. However, KYC is a labor-intensive, repetitive process that is prone to human error. This blog explains how smart contracts for KYC can solve problems related to customer fraud and identity theft. Before that, let’s consider what smart contracts are and how they work.

What are smart contracts?

Most industries are eagerly adopting blockchain technology for smart contracts. According to Statista, “in 2021, global spending on blockchain solutions is projected to reach 6.6 billion dollars and is expected to reach 19 billion US dollars by 2024.” 

Investopedia defines a smart contract as a self-executing contract that entails an agreement between the buyer and the seller. A smart contract encodes the agreement/ transaction between two parties and exists across a distributed, decentralized blockchain network. Smart contracts eliminate the need for an external party or an intermediary to enforce the contract as defined. The decentralized blockchain network controls the execution of trusted transactions and agreements. All the transactions are trackable, irreversible, and impossible to manipulate because of the immutable audit trails created by blockchain.       

In simple words, smart contracts are programs that run based on predetermined conditions. Participants engaged in a smart contract are sure about the outcome. The unique digital structure of a smart contract makes it super secure and resilient to any kind of data modification. What problems do smart contracts solve, though? Here are a few examples of real-world problems solved by smart contracts.

Read more: Leveraging Blockchain Technology to Transform Supply Chain Industry

How does a smart contract work? 

A smart contract is a blockchain application. Just as a standard legal contract, a smart contract outlines the terms and conditions between two organizations. It works on a condition-based principle, that is: ‘if-when-then.’ Smart contracts allow you to define as many conditions or terms as you would require. Moreover, a smart contract enables both parties to interact in real-time, saving enormous time and resources. Additionally, it allows for anonymity, if needed. 

How smart contracts assist banks and financial institutions to solve KYC-related problems?

1. Identity theft

Clients’ identity includes data on where they live, their passport number, driving license, security number, and so on. These data points are stored in centralized databases. If a criminal gets hold of one of these documents, they can exploit certain security flaws and steal your client’s identity. Cybercriminals can use your customer’s identity to gain some financial advantage or steal money. There have been occasions when a criminal successfully stole a deceased person’s identity to commit crimes. 

Smart contracts on blockchain offer a novel solution that may include a comprehensive electronic signature service. It allows access to a private key and a public key. While a public key provides access to your public records, it offers concrete security as no one has access to change or edit your data. However, a private key allows you to give access to those required. This simple method helps prevent and restrict identity theft. Best-in-class data encryption technology ensures the highest levels of safety standards.

Read more: How Blockchain Enables the Insurance Industry to Tackle Data Challenges

2. Distributed user data collection

Smart contracts enable finance companies to uncomplicate the process of identity verification. It can make data available on a decentralized network. For example, claiming, verifying, and processing insurance has always been a labor-intensive task that frustrates your customers. Smart contracts offer a single source of truth, drastically reducing friction in the business process. 

Here is how smart contracts simplify the process:

• Make data reconciliation easy
• Improve accuracy
• Minimize time spent in uncovering information
• Enhance improvements in speed and accuracy
• Improve customer experience

3. Automation and standardization of operations

Client data is collected daily. Name, address, and social security number are required for almost all transactions. Considering the recent progress achieved on KYC policy standardization, it is now possible to use smart contracts to control operations and execute agreements or transactions. 

You can streamline the procedure across the industry by coding and standardizing the KYC workflow. It will minimize manual oversight and increase the effectiveness of the KYC system. It even allows you to implement multilingual solutions with the help of translation tools and smart contracts. Since smart contracts remove the need for a manual process for each document, decisions can be made quicker.

4. Comprehensive authentication process

It is crucial to verify the identity of individuals for data protection compliance and the prevention of fraud. A cryptographic verification solution is vital here. On the other hand, industries face another major challenge – allowing users to conduct online banking through apps. The glitch is that if a person loses her smart device, she exposes herself and the bank to a greater security risk. 

Fortunately, the blockchain’s decentralized model almost eliminates the security risk by not allowing any edits on the data accessed by the thief or the fraudster. Once a smart contract on blockchain is formed, it remains immutable. 

5. Communication and transparency

The smart contract will allow you to monitor everything from account openings to day-to-day transactions actively. Since the terms and conditions are pre-defined, it is recorded immediately, and remittance is raised automatically. This process avoids laborious approval workflows. 

Since it allows for trust data to be stored on the KYC smart contract platform, banks or financial service providers can eliminate the secondary validation processes and cross-checking. Apart from this, when mistakes occur, they are quickly identified, reported, and solved. While transparency has to be dictated by the parties involved in traditional contracts, smart contracts always remain transparent. Such openness makes tracing transactions less cumbersome and could be traced right from the point of origin. Additionally, it automatically creates fully accessible history. 

Read more: How AI and Machine Learning are Driving Cyber Security in FinTech?

6. Heightened security 

KYC banking processes can go on for weeks, highly increasing the maintenance of regulatory compliance as the industry struggles to dodge financial fraudsters and terrorists. Fortunately, a shared ledger will help adjust and monitor the KYC process for all those involved. This would allow all parties to view any changes or updates made to the clients’ data. Such direct access would save on the time-intensive process of identifying suspicious activity and reporting it.

Read more: The New Untapped Opportunities for FinTech Companies in the Coming Years

Get smart with smart contracts!

As you can see, Smart Contracts are so much more than just an intelligent way of handling contracts. They are going to become the only way, and it’s time you get ahead of the competition by leveraging this technology. Contact Fingent, a top custom software development company, for all your software needs. 

Embedded finance, aka embedded banking, is transforming the financial services distribution model. E-commerce companies, Point-of-Sale systems, ride-sharing apps, food ordering apps, and other digital financial service providers consider it a revenue opportunity. 

Is 2024 the Beginning of the Embedded Finance Era?

With over $7 trillion in revenue, embedded finance has generated a significant buzz in the FinTech market. Sadly, the financial services industry has not upgraded its core business model in years, and the COVID-19 pandemic has made the need even stronger than before.

While banks and insurance companies have spent exorbitant amounts of money digitizing their existing processes, it is high time that they invest fully in creating digital business models to recover the economic crisis.

Read more: The New Untapped Opportunities for FinTech Companies in the Coming Years 

Embedded finance helps businesses overcome digital adoption barriers and offer outstanding financial services to customers. While embedded finance will benefit the economy globally, its potential implication for the FinTech industry is massive.

Fingent’s FinTech application development services continuously provide financial service and technology innovations, valued by global financial services institutions. 

What is Embedded Finance?

Embedded finance is the amalgamation of a non-financial service provider with a finance service. It allows enterprises to create new revenue streams and reinvent the services they offer their customers. It is beneficial to both the enterprises as well as users. In most cases, it is easier to buy products from one single source instead of interacting with many other businesses over the day.

FinTech is already growing at a significant rate, and the pandemic has caused more people to use day trading platforms from lending sites to stocks.

As the world will start incorporating FinTech in their lives, embedded finance opportunities will increase in the future.

What are the opportunities for Embedded Finance?

The most significant advantage of embedded finance is that it streamlines financial processes. Previously, there was a gap between a consumer and the service provider or seller. So, the consumer would often approach a lender or a bank to bridge the gap. However, with embedded finance, the need for a third-party bank or lender is eliminated. Here are a few examples to understand how embedded finance can help you.

Read more: FinTech Innovation: What Is In Store?  

1. To make payments

For some consumers, paying with cash for a purchase hurts, making them reconsider a purchase. Embedded systems help eliminate this pain. A consumer using a mobile app with an embedded payment program can tap a few buttons and make a purchase instead of digging into their wallets for cash – for example, a ride-sharing app like Uber. So, when you book your ride, you don’t have to pay the driver cash or pull out your debit or credit card at the end. Instead, you complete the transaction in the app after you reach your destination. You can also use the embedded system to order your favorite cold brew or lip-smacking snack from Starbucks. The mobile app allows users to order and pay for their best-loved delicacies. Starbucks’ online ordering system also rewards customers with redeemable points for every purchase.

2. Lending

Before embedded finance, a person had to apply for a bank loan or open a credit card if he/she needed to borrow money. However, with an embedded system, a person can apply for and secure a loan at the time of purchase.

Klarna and AfterPay are examples of embedded lending. These programs split an online purchase into smaller monthly payments. For instance, a payment of $100 can be divided into four installments with $25 each.

Read more: FinTech: Safeguarding customer interest in the post-pandemic world 

3. Insurance

The need to consult an insurance agent or broker for purchasing an insurance policy is eliminated with embedded insurance programs. In the past, buying insurance was needed to buy a car or a house. Also, it was a completely separate part of the process. Some companies have now found ways to speed things up and increase their bottom line by embedding the action of applying for an insurance policy into making a necessary purchase.

For example, Tesla offers an insurance program that allows people to purchase an appropriate amount of coverage almost instantly. Additionally, the insurance available directly from Tesla costs less than a policy from a third-party insurance provider. 

4. Investment

Most people feel investing is a complicated process and prefer to stay out of it. However, embedded banking programs help simplify the investing program. 

For example, Acorns is a program that invests your spare change by rounding up purchases, thus making investing seamless and touch-free. It doesn’t require you to manually pay back the money since the app takes care of that. They adjust their portfolio according to the market, and so you don’t have to pay attention to the values of mutual funds or stocks.

How can enterprises use embedded finance or banking in their products or services?

Organizations can embed finance or banking in several ways. Even companies that are not in the FinTech industry are seeking ways to offer financial services. For instance, Shopify is offering lending services and bank accounts to companies. Organizations like Udaan and Grab have also started financial services like Udaan Credit and GrabPay.

In some cases, companies can act as connectors between financial services and non-financial businesses. For example, organizations can use a data transfer network by Plaid to offer financial products.

Another option for companies is that they can work with businesses that embed the required infrastructure into their products or services. With an increasing number of transactions and payment processing, the platform ecosystems can expand quickly, giving rise to the need for external financial services.

Read more: Technology in Finance: What to look out for in 2021?  

How is embedded finance beneficial to companies?

1. A new revenue system

Most customers show displeasure when redirected to multiple applications or experience a failed transaction due to timeout. The best resolution to this issue is to have a single unified flow in the customer journey. Customers would stay loyal to a brand if they have an easy-to-use eCommerce website.

Companies can charge a small fee as a commission on such transactions. It helps companies to have a new revenue opportunity without investing in bringing in new customers.

2. Increased hit rate/footfall

Embedded finance products can boost footfall if they can provide an overall improved experience. Given the cut-throat competition, customer loyalty can decline when a better product is launched in the market. Consumers will not hesitate to switch their allegiance to a competitor as long as they get what they need.

Companies can expect an increase in hit rate and better scope of converting users to potential customers with embedded finance products. If the transactions are smooth, the conversion rate will improve.

3. Use existing resources

Organizations need not worry about the expenses and resources needed to acquire new customers or procure high-level infrastructure. By including a financial angle to create an embedded product, you can modify the current systems.  

4. Improved customer experience

Embedded finance helps companies create a unified journey for their customers. Offering more services to the customers will eliminate their need to deal with a third-party vendor for completing their transactions. It will result in higher profits. The direct connection between the customer and the company will help improve the customer experience significantly.

Read more: Digital Transformation in Financial Services: All You Need to Know  

How will embedded finance change the future of the FinTech landscape?

With the evolving nature of technologies, embedded finance will persist due to its customizable nature. It will give rise to new opportunities and reduce the gap between various industries and their interactions. 

Companies must be open to collaborating to build a bigger market, survive, and stay ahead of the competition. Software solutions providers and technology companies like Fingent play a crucial role in boosting the financial services landscape. Contact us to know more about our FinTech software development services and solutions. 

Technology in Finance: An Overview of the 2025 Landscape 

Technology in finance, along with evolving consumer behavior and regulations, are transforming the financial services industry. The COVID-19 pandemic is accelerating the industry’s focus on digital offerings. Government payment schemes, emergency loans, and personal finance management are the need of the hour.

With several bank branches shut and long waiting hours for phone assistance, financial institutions are forced to invest in better IT infrastructure, relevant automation, and technology in finance to deal with the growing consumer demands.

Read more: The impact and significance of digital transformation in financial services. 

A study of financial institutions (FIs) by ISMG and OneSpan in North America revealed that providing customers with a top-notch experience is their main priority. 49% of the respondents feel that legacy and manual ID verification are the biggest obstacles to digital opening for FIs, while 35% found that knowledge-based authentication tools were obstacles to onboarding. 

Some general FinTech statistics worth knowing are:

• By 2022, the global financial sector is expected to be worth USD 26.5 trillion with a CAGR of 6%.
• 49% of banks and 60% of credit unions in the US believe that FinTech partnerships are worth it.
• Digital payment is one of the most significant FinTech products and holds about 25% of the FinTech market.

That said, many banking and financial institutions are adopting the latest technologies such as artificial intelligence, blockchain, etc., into their operations to benefit their customers, stay competitive, and improve business growth.

Read more: FinTech: Safeguarding customer interest in the post-pandemic world 

Here are the top five technologies that transform the financial services industry currently. 

1. Artificial Intelligence

The most crucial advantage of Artificial Intelligence in the finance industry is cost savings, which is anticipated to be worth $447 billion by 2023.

AI systems are a game-changer for the finance industry as they can examine vast amounts of data and find patterns and trends that people may miss, and even predict future trends. AI technology makes it possible to automate processes and manage tasks such as comprehending new rules and regulations or generating personalized financial reports for individuals. For example, IBM’s Watson is capable of understanding complex regulations, including reporting of markets’ requirements in the Financial Instruments Directive and the Home Mortgage Disclosure Act.

Chatbots in banking are helping automate simple tasks such as opening a new account or transferring money between accounts and are proving to be a great money-saving tool.

Many financial institutions such as Bank of America and JP Morgan Chase use AI to streamline customer service. Additionally, AI facilitates mobile banking that allows 24/7 access to customers to conduct banking operations. AI is also helping financial institutions boost security and detect and prevent fraud. 

2. Blockchain

Blockchain is a promising technology that will impact financial systems significantly. Blockchain technology is inspiring to create several P2P (peer to peer) online financing platforms that help monetary interactions happen in a more decentralized way. Blockchain technology can improve existing systems and processes and create cryptocurrencies.

Five typical applications of blockchain include:

• Make cross-border transaction processes faster, more accurate, and less expensive
• Banks can leverage trade finance to create smart contracts between participants, increasing transparency and efficiency
• Clearing and settlement procedures
• Protect against fraud and speed up the verification process with blockchain-enabled IDs
• Credit-reporting

3. RegTech

RegTech is a regulatory technology that uses cloud computing technology through SaaS (software-as-a-service) to help businesses comply with regulations efficiently and lower costs.

The various areas of RegTech intervention are:

• Data management
• Reframing regulations and implementing new governances
• Real-time reporting
• Data- analytics and decision
• Fraud and risk management

Non-compliance with mandatory government rules leads to fines and crisis. So most FIs want to do everything in their power to avoid non-compliance.

The need for RegTech solutions is growing as FIs grapple to stay compliant with new and existing regulations. RegTech solutions will create a layer that companies will rely upon significantly. Its high accuracy, single dashboard, data analytics, alerts, and insights will help companies optimize resources allocated to compliance and achieve better results.

4. Machine learning 

Similar to AI, machine learning helps create a marketing campaign around the consumer. It enables you to understand what kind of services will attract your target market. For example, how people find a financial website, what page they clicked, and what services they need.

Machine learning algorithms and their capability for sentiment analysis will impact trading significantly in the future. It involves using enormous volumes of unstructured data such as photos, video transcriptions, social media posts, presentations, webpages, blogs, articles, and business documents to understand the market sentiment.

Sentiment analysis will transform the future financial markets, and many believe that machine learning will be central to developments.

5. Big Data

According to the IDC Semiannual Big Data and Analytics Spending Guide, currently, banking is one of the top investors in big data and business analytics solutions. Credit card transactions, ATM withdrawals, credit scores, etc., generate massive amounts of data. Deriving actionable insights from this data is crucial to optimize financial processes and make effective business decisions. It will increase the competency of financial institutions in the future. 

Big data can help FIs learn more about customers and make business decisions in real-time. Big data analysis allows FIs to identify market trends and streamline internal processes and reduce risks.

Read more: FinTech Innovation: What Is In Store? 

The Future of FinTech Adoption

82% of traditional financial organizations plan to collaborate with FinTech companies in the next five years as they fear losing out. 88% of established FIs believe that they may lose to standalone FinTech companies in the next five years if they fail to adopt FinTech innovation.

Financial companies will have to work towards providing a seamless digital experience for their consumers. To avoid the risk of losing out in the market, many FinTech startups, incumbent financial institutions, and technology companies are entering into new partnerships. 

Read more: The New Untapped Opportunities for FinTech Companies in the Coming Years 

Technology in finance is no different than other disruptive technologies across various industries. It would be wise for even small businesses to consider FinTech as an investment for the future. Fingent has developed end-to-end disruptive technologies and innovative FinTech solutions that will help your business thrive and stay relevant. Contact us for more details.

The Future of FinTech Looks Promising: Here’s Why!

The COVID-19 pandemic has caused significant disruption and has also cast doubts on the future and growth of the FinTech industry. Despite the devastating impact of the coronavirus pandemic on the global economy, FinTech leaders remain cautiously optimistic about the industry’s growth. They forecast that as people, businesses, and leaders tackle the ongoing outbreak of the pandemic, market fluctuations will experience stability. As soon as the crisis situation is settled, the market is forecasted to start experiencing growth. FinTech solutions are foundational to how we transact in the current scenario and tackle the future market. It is vital for financial institutions to up their game to deliver smarter, quicker, and safer solutions. 

What are the upcoming FinTech opportunities that will impact everything in the financial ecosystem? 

The ‘Digital-Only’ Era

1. Digital payment services 

The coronavirus crisis has brought the significance of cash management to the forefront. There are massive technical and fundamental shifts taking place that are quickly becoming the new normal. Digital-only banks are one of the many such shifts and they increase efficiency and convenience. Nobody is expected to visit the bank physically, stand in long queues, and go through a lot of paperwork. With digital-only banks, you can create an account or transfer money at a location and time convenient for you. Some of the amazing features of digital-only banks are a quick review of account balance, account transaction history, bill payments, and real-time analytics. They offer P2P payments with no transaction fees. They also offer Ethereum and other cryptocurrency transactions. Digital-only banks have a deep connection with technologies such as blockchain.

Read more: How Digital Finance Could Boost Growth in Emerging Economies 

2. Digital lending 

Digital lending is one of the FinTech opportunities that’s prospering while shutdowns and layoffs across the globe resulted in a cash crunch for most individuals and households. Governments have provided some help. However, it is largely left up to financial institutions to provide loans to individuals and businesses. Fintech companies perform better than their traditional counterparts in the lending segment by leveraging AI technology. They can use AI to screen applicants and rate their credit-worthiness. It allows loan applicants to secure loans quickly and conveniently. 

Financial institutions must partner with FinTech application development service providers to leverage self-service, multi-channel digital lending processes. This includes loan processing, screening, collection, and credit scores. As an end-to-end process, it will provide customers with a smooth onboarding and approval lending experience.

3. Digital investing 

Retail investors around the world are more active in the stock market now than ever before. Access to information that was previously restricted to more advanced investors, has fueled an exponential increase in retail investing. This trend will continue.

Read more: FinTech Innovation: What Is In-Store?

The Era of Blockchain Technology 

Identity theft and fraud have been the bane of financial institutions for many years. Blockchain technology plays a crucial part in saving the industry from these problems. The rapid growth and adoption of blockchain is making it an integral part of financial institutions’ operational infrastructure including digital payments, trading shares, smart contracts, and managing identities. Blockchain features such as global reach, speed, and security are motivating its faster adoption among financial institutions. 

Companies must build trust and display transparency in contracts and the supply chain. Using blockchain helps them gain visibility throughout the supply chain. It also takes care of quality control and performance benchmarks. It is crucial that financial services quickly adopt blockchain into their systems and search for opportunities to increase FinTech partnerships. 

Read more: Leveraging Blockchain Technology to Transform Supply Chain Industry 

Impact of Regulation

Regulators are needed to balance innovation with customer interests. Regulators have been proactive in helping businesses deliver greater customer value by defining data privacy rules. This has fueled a massive shift in how people spend, buy, save, borrow, and invest. Given the enormous innovation in this sector, the FinTech arena is divided into five broad categories:

• Deposit, lending, and capital raising
• Payments, clearing, and settlement
• Investment management
• Insurance
• Market support

We know that compliance with regulations will become mandatory for banks. This makes it important that banks adopt a flexible and robust digital strategy in order to solve regulatory challenges. Leveraging digital transformation and FinTech innovation will help banks to evolve as a modular body that becomes highly responsive to political and social pressures.

Read more: Digital Transformation in Financial Services: All You Need to Know!

Robotic Process Automation

Robotic Process Automation (RPA) can automate repetitive processes in banking, insurance, and other financial services. This will lower the risk of common errors and inefficiencies while increasing productivity and ROI. RPA does not require programming. Efficiently programmed software robots can automate repetitive processes. Intelligent automation technology goes a step ahead to observe human actions and automate directly, the entire process. IA can be effectively used in the administrative section for the customer onboarding process, risk assessment, data analysis, security checks, and more. 

Read more: How Robotic Process Automation Is Revolutionizing Industries? 

What must you do to take advantage of these opportunities? 

Here are a few things you can do to leverage the massive opportunities made possible by the digital-only era:

1. Infrastructure

Financial institutions must invest in the right technical infrastructure. With multiple technology options available in the market today, it is imperative for financial institutions to make the right decision based on the company’s needs and objectives.

2. Market proposition

Develop a clear market proposition. You must partner with FinTech companies to develop robust and scalable apps. Having them as trusted advisors will help you retain your customer base. 

3. Partnership

Before partnering up with FinTech companies, you must examine their needs and plan on how they want to execute them. This will help you derive greater benefits from the partnership.

4. Product hierarchies

Incorrect product or service information can damage the good reputation of your company. Have a clear definition of products and services and outline their use and cost. This will minimize reputational risk and maximize the opportunity to retain and acquire customers. 

5. Switching 

Most bank customers may want to switch their accounts. You must allow switching and help your customers to switch seamlessly between products. 

6. Educate your customers

Your customers may not be aware of the digital services you provide. Hence, it is important that you educate your customers regarding the use, safety, and implications of your digital technology. 

Read more about our Case Study: How Fingent enabled NEC Financial Services to take advantage of the FinTech revolution?

Explore FinTech opportunities

Access to data presents new opportunities for growth. With continuous technology penetration, financial services will see steady growth resulting in the expansion of FinTech. In many ways, FinTech contributes to the revolutionization of the financial sector and the way customers interact with your business. It offers your customers a hassle-free experience and helps your employees to be more productive. 

Read more: FinTech: Safeguarding customer interest in the post-pandemic world 

FinTech will help you keep your focus on customer experience and personalization that can drive user loyalty. For a technology partner who will get you to reach new heights in this new era of Fintech, call us! 

The impact and significance of digital transformation in financial services

Changing customer expectations, increasing regulatory complexity, stiff competition, and other factors are constantly pushing businesses for renovation and innovation. Also, the rising number of FinTech companies and solutions over the last few years have completely transformed the financial services landscape. Rather than just technology, digital transformation in financial services has now become an integral part of a successful business strategy. Digital transformation in the financial industry has improved employee and customer experience by helping meet regulatory deadlines and ensure cost-effective operations while remaining highly competitive.

If you consider how banking has transformed over the years, you will understand how digital transformation in banking and financial services has grown to benefit everyone with convenience. From simple branch offices to ATM and mobile apps, digital transformation has offered greater convenience, choice, and experience. Today, customers are gravitating more towards digital experiences and products.

What is the importance of digital transformation in the financial industry?

According to a recent report by Global Economic Prospects, the global economy will contract by over 5% in 2020 due to the COVID-19 pandemic.

However, the crisis has accelerated economic transformation, leading to an increase in the adoption of digital financial services.

Although the digital transformation was a development priority even before the COVID-19 crisis, it has now become indispensable for both short-term as well as long-term sustainable recovery efforts. 

Here are four fundamental shifts that are forcing financial institutions to accelerate the rate of digital adoption.

1. Forced adoption of online and mobile channels

Social distancing and lockdowns are forcing people to stay indoors or go outdoors only to buy essential items. This has forced the rapid adoption of digital technology across the globe.

Deloitte reports that the United States, which has traditionally lagged in digital adoption is experiencing an all-time high in the number of check deposits and mobile logins. Interestingly, the major contributors to this growth are baby boomers and senior citizens who have been typically slower to adopt the digital channels.

For example, Goldman Sachs reported a 25% increase in the number of active users on the bank’s institutional platform. Also, the country has seen a spike in call center interactions as customers seek protection from the financial crisis caused by the pandemic. 

2. Digital and contactless payments

The lockdown has witnessed a race among retailers to set up e-commerce capabilities to capture sales. With consumers shifting to online purchasing, there has been an acceleration towards digital and contact payments. 

While MasterCard reported over 40% growth in contactless payment across the globe, Visa reported a staggering 150% increase in the U.S alone. Hygienic payment modes such as digital wallets, scanning QR codes, click/tap-to-pay, etc. have taken off well to encourage contactless payments during the pandemic.    

Read more: FinTech: Safeguarding customer interest in the post-pandemic world 

3. Virtualization of the workforce and ways of working

Previously, financial institutions hardly imagined their workforce working remotely. But, the COVID-19 pandemic has forced financial services companies to build a remote work model.

Wells Fargo and Bank of America have pushed almost 70% of their employees to work from home and have established contingency locations for those employees who are into trading and operations. Standard Chartered Bank has kept most of its employees working from home, increasing its VPN system capacity to 600% to keep pace.

Bandwidth issues aside, this transition has been largely successful due to digital disruption in financial services. Most financial companies have even committed to making the remote working model permanent. 

4. Evolution of economies and underlying market structure

Even though financial companies have been enjoying stability for years, the COVID-19 pandemic has fuelled margin pressures for companies.

On one hand, insurers are fighting lowered premiums and high claim costs due to the market scenario, while on the other hand, banks are affected by reduced interest rates. Though it is difficult to predict the duration of the economic downturn, it is forcing financial services companies to operate effectively and efficiently to remain competitive in the market. 

Moreover, as the market dynamics continue to evolve, “big tech” is likely to reinforce its foray into financial services leveraging its scale, size, and expanding its role in the consumers’ day-to-day activities. Also, smaller FinTechs could be at risk with their funding models. All these evolutions will have a substantial impact on buying, building, and partnering decisions for many incumbents as well as start-up financial companies.

Top 6 digital transformation trends in the financial industry

1. Mobile banking

The digital banking environment allows customers to transfer funds, deposit checks, and apply for loans easily from their mobile devices. Today customers prefer to do online banking at their convenience instead of visiting the brick-and-mortar banks. More and more customers prefer to use mobile banking as it allows 24/7 access, almost negligible waiting time, and ease of use. Mobile banking has changed the functioning of banking and financial institutions to a great extent and is expected to grow further in the coming years.

2. Blockchain

Blockchain is gaining momentum steadily and will play a crucial role in digital payments, loan processing, escrow facilities, etc. Additionally, Blockchain will be used in RegTech (a new technology that uses information technology to streamline regulatory processes) to avoid unnecessary regulation breaches.

3. Big data

Big data is everything. Financial institutions including banks are using machine learning to process data and drive analytical solutions effectively. Big data helps banks and other financial institutions to serve their customers efficiently by tailoring their services based on the insights gathered. Eventually, this can help financial institutions to bring in more investment and create a great work environment for both employees as well as customers. 

4. Mobile apps

While everything in banking and other financial services is going mobile, there are third-party financial service providers who are competing with the banks. They could be financial managers, unconventional leaders, or financial budgeting mobile apps. Banks will have to consider ways to integrate these third-party services- what information to provide, the companies they want to partner with, and which services they are likely to offer to their customers directly without the need of the middle-man.

Read more: Business Intelligence in Financial Services

5. Automated Wealth Managers

Artificial Intelligence (AI) is disrupting several industries with automation and numerous other possibilities. Wealth bots or automated wealth managers use complex algorithms to calculate the best investment opportunities, best loan providing institutions, best interest rate, etc. Automated wealth managers have made financial planning a breeze and are also helping people achieve their business objectives accurately and with great returns.

6. FinTech (Financial Technology)

FinTech is a modern technology adopted by banks and financial companies to deliver financial services efficiently. It has improved drastically since its ATM and credit card days to the latest digital banks and blockchain technology.

FinTech along with automated technology and machine learning algorithms are revolutionizing the world of finance. Digital technologies such as customer service chatbots, expenditure tracking, and online budgeting tools are some examples of how far financial services have come today. 

How Fingent can help you?

As your digital solutions partner, we will help you navigate industry disruption and equip you for future challenges. We apply our extensive experience and deep industry knowledge in fintech to guide you to see digital transformation through fruition. Here, we top custom software development company ensures to maximize value with minimal disruption to your existing infrastructure to help achieve your goals. Get in touch with us to learn more. 

The inevitable role of FinTech in improving your financial systems and outcomes

The COVID-19 outbreak has affected every aspect of the economy including financial technology or FinTech. Postponed events and conferences mark missed opportunities for FinTech companies, which could have been a great time to build relationships and focus on new businesses. As investors and customers retreat to more cautious positions, FinTech companies may find fundraising a challenge. Those who seek consumer investments are hit harder. Consumers may be reluctant to invest during such volatile times. Even those consumers who are relatively insulated from economic fallout may choose to invest in safer options for the present. FinTech innovations can improve the efficiency of the financial system and financial outcomes for their customers. This article will discuss how FinTech can safeguard customers’ interest in the post-pandemic world. 

What is FinTech?

FinTech is a combination of Finance and Technology. It is used to describe new technology that can improve and automate the use and delivery of financial services. It also enables people to live upgraded lives through innovation. FinTech includes many sectors such as fundraising, education, retail banking, and more. It plays a major role in the development and usage of cryptocurrencies. FinTech also covers various day-to-day financial activities including money transfers, check deposits, and investment management.

Read more: FinTech Innovation: What Is In Store?    

Why protect customer interest?

Customers are the primary source of growth, so they must be handled with the respect they deserve. Any product or service which is customer-centric offers the potential to attract and retain customers. Since FinTech provides advantages of speed and convenience, customers are looking at FinTech as a viable alternative. People want streamlined services with applications that are easy to adapt to. Hence, FinTech companies are outlining measures to make their services less complex and more transparent. They are focusing on creating better digital processes that their customers can personalize easily.  

Customers’ convenience and requirements are paramount for FinTech start-ups. To that end, they are designing products and solutions to ensure customer satisfaction. Delivering a top-notch customer experience is the goal of FinTech companies globally.

Measures to protect customer interest 

Here are some cutting-edge technologies that are protecting customer interest now and into the future:

1. IT foundation for better customer experience

FinTech startups are usually smaller in size and have a technological edge. They have a fresh canvas, allowing them to migrate easily from legacy technologies. The younger digital-first audience is attracted to their services. Larger FinTech enterprises must adopt a new IT foundation with modern technologies. Currently, FinTech customers prefer startups over established brands because they can reap the rewards in the form of better digital experiences. Though startups have a technological advantage, they must continue to focus on their capital reserves to make it through these unprecedented times. 

2. Digital communication tools 

The FinTech sector is based on understanding the needs of their customers. It is crucial for these companies to strategize the manner in which service providers communicate with their customers. This gets customers locked onto their services with relative ease. Communication through online media or through the content on your site can draw in new leads and build customer trust. When customer interest is protected, they will most likely return to you. In turn, they will recommend the service to their relatives and friends. These parameters are crucial if you want to keep your business afloat. 

3. Embrace digital transformation

While your staff may be susceptible to coronavirus, technologies like ML and AI are immune. The financial services system must address customers’ demands swiftly and efficiently. Smart devices and the integration of artificial intelligence are a great way to achieve this. Virtual assistants and chatbots can deliver a customized experience to your customers. They perform all the activities that are usually done by customer service personnel and other executives. However, these digital solutions are faster and reflect sophistication. Digital transformation provides holistic 24/7 monitoring and automated remediation. 

Read more: Artificial Intelligence In Investment Management: What To Expect 

4. Digital banking 

Previously, a customer’s confidence in a financial company depended mostly on physical infrastructure. However, COVID has changed that momentously! The new generation banking system is going all-digital to reach mobile-first customers. Digital-only banks do not need sophisticated infrastructure or higher human resource management. Digital banks are able to deliver cost-effective, robust services that match the high standards set by traditional banks.

5. P2P Transactions

P2P digital payment is quickly gaining popularity. Customers are adopting such technologies for daily use. P2P eliminates the middle layer and drastically reduces transaction costs. Digital transactions help FinTech enterprises expand their footprints and customer base. 

6. Security and privacy

FinTech is an industry where the risk of financial crime is high. It is vital for FinTech companies to think over customer security while designing their consumer experience. Apparent security measures make customers feel comfortable. Customers expect rigid security from FinTech solutions along with reliability and FinTech is practicing stringent security measures to beat the competition. They are making visible efforts to handle customer data with care. To gain the attention of your customers you can make your privacy policies visible enough on your website or app. Remember, it can reflect on the confidence a company has in its security measures.

Read more: Artificial Intelligence and Machine Learning: The Cyber Security Heroes Of FinTech 

Changing for the better

It may be difficult to predict how the payments landscape will emerge in the next few years and what will be the long-term impacts on the FinTech industry. Nevertheless, it is likely to witness a transformation that can dwarf what has been achieved thus far. At such times, it is important to gain the confidence of your customers to retain them and enjoy their loyalty. 

Thus far, FinTech has only been in the shadows as it were, but now it has found a home in the innovation economy globally. Millennials are more reliant on their smart devices to accomplish their daily tasks. They want the world and its conveniences at their fingertips anywhere and anytime. Given that, perhaps the future might see more interesting innovations in customer experience. 

Let’s look at some opportunities for FinTech in the future:

• Companies with remote workforces are better positioned to thrive during and after this difficult period.
• FinTech gives an impetus for greater adoption of contactless money transactions.
• FinTech companies are well-positioned to find new ways to incorporate better digital solutions.

In order to capitalize on all these opportunities, you will need a technology partner to help guide you through the latest innovations. Give us a call and let’s discuss how Fingent top custom software development company, can help you guide your business and customers to success in the post-pandemic world…