The financial services industry has proven remarkable adaptability to changing technologies, all the more evident with the current rise of FinTech. Companies and investors alike should take note of the financial sector’s shifting efforts toward furthering innovation. Here we explore five of these transformations already taking place now.
Biometrics and virtual reality
The way we interact with technology is constantly changing. Manufacturers are always looking for ways to make these interactions more convenient, all while prioritizing security.
Biometrics and other innovative methods of authentication like voice identification are being implemented on a larger scale, having a significant impact on the financial services sector. With convenience being among top priorities for consumers, these technologies are becoming mainstream even for apps containing sensitive information relating to finance.
Virtual reality is trending in the gaming world, but it won’t be long before daily responsibilities and tasks will move into this virtual landscape as well. The experience of managing bank accounts and monitoring investments might receive a radical update.
Blockchain isn’t just for bitcoin anymore. A true disruptive technology, blockchain is completely changing the way that financial institutions are moving forward.
Exciting applications for blockchain within the financial services sector include improving the accuracy of share trades and facilitating smart contracts.
Another key aspect of blockchain technology is its implications for making secure transactions, which is of the utmost importance for financial-services-oriented products.
While banks began adopting digital portals for their customers years ago, digital-only banks are one of the newest trends in financial services technology.
Younger demographics are drawn to these banks that not only offer intuitive user interfaces but compete with traditional business models that are starting to appear archaic to younger generations.
Banks without brick-and-mortar locations may scare away traditional customers, but features such as zero overdraft fees and competitive interest gains are very attractive.
Machine learning is a growing trend in financial services that have the potential to impact multiple areas of the industry.
Improvements in artificial intelligence have allowed for an unmatched level of fraud deterrence. Systems with advanced learning functions can adapt and react to the ever-changing methods hackers employ to commit fraud.
Customer service is another area of financial services that will benefit from advances in artificial intelligence. Watch for automated systems that will be able to communicate with customers over the phone or through chat interfaces in a way that is nearly indistinguishable from a human.
With the proliferation of all these new digital platforms, the question remains: what do we do with all this data?
Analytics are being used to better assess risk values when determining loan options for customers. Customer service is also being improved with the ability to parse customer surveys and determine overall satisfaction.
Customer data is more available than it ever has been and financial services will be using that data to get an edge in a competitive marketplace.
Ahead of the curve
The financial services sector’s longevity will be determined by its ability to accommodate changing technologies and customer needs. This adaptability is evidenced in up-and-coming investment products like ETFs, which allow for portfolio diversification and capitalize on innovative trends in finance and other industries.
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