3 Emerging Technologies in The Financial Business

Photo by Joshua Mayo on Unsplash
3 years ago

We’ve seen some significant technological advancements during the digital age, with several disruptive innovations dramatically altering the landscape of some markets while inventing new ones from scratch.

Nowhere is this more evident than the global financial services market, where ‘fintech’ innovations have continued to disrupt traditional banks and payment platforms.

Today, more than 75% of the world’s population use fintech services of one kind to another, including regions such as South Africa and the Middle East where large swathes of regional populations are unbanked.

In this post, we’ll appraise three of the most disruptive emerging technologies in financial services, while asking why they’re proving to be so important.

1. Blockchain

Let’s start with blockchain, which is a distributed ledger technology that’s behind the world’s fast-evolving crypto space.

Completely decentralised and capable of processing immutable transactions, blockchain technology has revolutionised the financial services space and retains the potential to grow even further in the near-term.

For now, even trail-blazing crypto assets such as Bitcoin retain relatively low rates of adoption, but this is set to change with the launch of third-generation blockchain technologies. These entities are tackling core issues of scalability and rising transaction fees, creating the scenario where even traditional banks are beginning to consider integrating crypto assets into their model.

JP Morgan Chase is already utilising Bitcoin, for example, while the widespread adoption of blockchain in such institutions could potentially save them $10 billion in clearing and settlement fees.

2. Chatbots and Artificial Intelligence (AI)

Chatbots are perhaps the best-known and most simplistic iteration of AI in the financial services and iGaming spaces, with these intuitive tools allowing customers to connect instantly with brands and resolving simple queries with the minimum of fuss.

Chatbots are certainly part of the ongoing digital transformation in banking, while they also highlight the rising prominence of AI within this industry and the individual business models adopted by institutional lenders.

Make no mistake; AI is becoming increasingly influential throughout the banking realm, from back-office administration and product delivery to risk management, marketing and the elimination of human error. Machine learning is central to this, with algorithms now being used to do everything from accurately input customer data to evaluate a candidate’s suitability to receive a loan.

AI is also revolutionising the financial and forex trading marketplaces, enabling even novice and part-time investors to gain a deeper market insight and compete on a more level playing field with experienced traders.

3. Automation

While the terms ‘automation’ and ‘AI’ are often used interchangeably, the former utilises a simple set of rules to create simple results and represent the most basic financial tasks.

Automated programs can encompass both structured and unstructured data, and so far they’ve played a key role in managing digital transformation processes and the approval of loan or credit applications.

More recently, lenders and banks have begun to integrate automated learning patterns into their models, with a view to more accurately processing large data sets and utilising this more efficiently.

This is particularly important in the age of big data, where banks now have access to huge and diverse datasets that can better inform their products, marketing and the way in which they interact with their customers.

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