Technological disruptions over the last few decades have changed how we communicate, talk, make purchases, and do business. Emerging technologies in the financial services industry have consistently disrupted how consumers interact with their money, what they expect from financial institutions, and how those organizations operate. Today, new technologies make processes easier, more efficient, reduce errors, improve communication, and change how consumers see and interact with money.
How Emerging Technologies Impact Finance
- Response to customer needs. .
- Optimization of costs.
- Creation of new revenue streams.
- Development of security and compliance systems.
- Customer-centric perspective
- Real-time intelligent data integration
- Open platform foundation
Few Emerging Technologies in Finance
1. Hybrid Cloud
According to IBM cloud computing has quickly become mainstream in banking, with most banks searching for the optimal mix of traditional IT, public and private clouds. Over time, more and more banks are moving to an enterprise-wide hybrid cloud strategy.
2. API Platforms
The combination of open platform banking and open APIs will change the entire banking ecosystem as we know it, from the products and services offered, to the delivery channels used and underlying partnerships that will shape innovation and customer experiences in the future. With public APIs, customers will have more options to interact with their bank.
3. Robotic Process Automation (RPA)
Across financial services, robotic process automation (RPA) has helped banks and credit unions accelerate growth by executing pre-programmed rules across a range of structured and unstructured data. This intelligent automation gives processes the power to learn from prior decisions and data patterns to make decisions by themselves – reducing the cost of administrative and regulatory processes by at least 50% while improving quality and speed.
Robotic process automation in banking also simplifies compliance by keeping detailed logs of automated processes, automatically generating the reports an auditor needs to see, and eliminating human error. Since it’s intuitive and easy to re-configure software robots at any time, tweaking processes to fit new or updated regulations is never difficult.
4. Instant Payments
Technology has changed consumer and business expectations in payments. Instant payment options are available in many markets despite the lack of immediate payment infrastructures. In some countries, banks offering alternatives to immediate payments actively market apps to their own customers, and in some countries banks even partner together to offer an immediate P2P payment experience to a wider customer base.
5. Artificial Intelligence (AI)
Heightened interest in AI has occurred because of both capabilities and business needs. The explosive growth of structured and unstructured data, availability of new technologies such as cloud computing and machine learning algorithms, rising pressures brought by new competition, increased regulation and heightened consumer expectations have created a ‘perfect storm’ for the expanded use of artificial intelligence in financial services.
Experts say blockchain could have a transformational impact on the banking industry. Many see banks adopting blockchain technology to improve efficiency, cost-effectiveness, and security throughout the entire spectrum of financial services.
7. Prescriptive Security
The nature and incidence of cyber risk is unique and changing without notice, meaning that typical approaches to risk management may not be appropriate. The potential sources of cyber threats and the attack footprint are impossible to eliminate, requiring organizations to be nimble in their approach to cyber security.