The realm of financial services stands on the cusp of a revolution driven by advancements in artificial intelligence (AI), robotics, and blockchain technology. However, the extent to which these potentially transformative digital technologies have been adopted remains a question.
A potential disparity exists between the perceived capabilities of new technology and its actual implementation. Is your business adequately prepared to embrace these novel technologies? Continue reading to delve into recent instances of digital disruption within the finance sector.
1] Open APIs
In the domain of payment services, open APIs (application programming interfaces) play a pivotal role in fostering collaboration. They serve as bridges connecting financial institutions, enterprises, customers, and products and services. By facilitating seamless communication and interaction between software programs and applications from diverse companies, they ensure reliable online banking and an enhanced customer experience.
Financial institutions now can offer a broader array of services to their clients by exposing their application programming interfaces (APIs). This enables other businesses to access specific company data and capabilities, easily integrating them into their digital payment systems. Such integration ensures the resilience of the financial sector in the contemporary digital economy.
2] Hybrid Cloud
Experts assert that cloud computing is rapidly becoming the standard in the banking industry. Most institutions are in pursuit of the optimal blend of on-premises servers, public clouds, and other cloud computing forms. The adoption of a hybrid cloud approach is gaining traction across numerous financial institutions.
The hybrid cloud model provides the scalability of private clouds while incorporating the security, governance, and compliance features of public clouds. For financial institutions, a hybrid cloud holds the potential to deliver cost savings, heightened operational efficiency, and enhanced creative thinking.
3] Artificial Intelligence (AI)
Despite a general reluctance towards change, a recent study reveals that a majority of decision-makers in financial services are investing in artificial intelligence (AI). A notable 52% of executives confirm making “substantial” AI investments, with 72% believing it will confer a competitive advantage. The projected savings of $447 billion by 2023 undoubtedly serve as a convincing argument for the potential of AI, even for skeptics.
The application of AI within banking institutions encompasses various dimensions. From chatbots and robotic customer care to enhancing security and fraud detection, AI is integral. It underlies big data analytics, robotic process automation, voice interfaces, and aids financial institutions in risk management and lending decisions.
4] IoT or The Internet of Things
The Internet of Things (IoT) is an interconnected network of physical objects and organisms, enabled by wireless technology and linked through the Internet. IoT is reshaping the financial services landscape by bolstering mobile banking security, automating financial transactions, and operations, and enhancing the overall consumer experience.
5] Robotic Process Automation (RPA)
Robotic Process Automation (RPA) employs software robots, forming a virtual workforce that effectively handles back-office, front-office, and support functions. This enables financial institutions to automate repetitive business processes and operations.
6] Voice Interfaces
Increasingly, financial institutions are leveraging chatbot solutions powered by advanced AI to streamline customer interactions. These solutions save costs and efficiently address client inquiries and issues.
Conclusion The rapidity with which conventional technologies have become the norm is mirrored by the speed at which emerging technologies that fuse digital prowess with data are becoming commonplace. The allocation of resources to various emerging technologies hinges on each company’s business model and strategic objectives.
For instance, blockchain technology holds significant value for the financial services sector, despite modest market-wide investment intentions. To remain competitive, any enterprise must undergo digital transformation. This holds true not only for the financial sector but also for other domains like retail and healthcare—underscored by the fact that these are all prime arenas of digital disruption. In a market where customers increasingly demand expanded services, banks require digital transformation for survival.