Finance basics and our relationship with money are an essential part of our society. The financial institutions are also integral parts of the country’s economy. The seamless functioning of these sectors is vital for economic growth. Who people trust with their money and how financial customers expect to be treated are also changing. This is due to the advent of digital technology.
The financial sector has undergone a tremendous shift in its mode of operations over the years. All thanks to the development of technology. The industry is shifting its focus toward innovation to prepare for a future driven by technology. New trends are now gaining momentum at a fast pace. These include fintech companies, internet banking, mobile banking, and others. Customers are also finding it convenient and more flexible to do transactions. Continue reading as we discuss the transformative trends revolutionising the financial sector.
The emergence of the COVID-19 pandemic has made people and businesses reluctant to handle physical money. It has also increased contactless payments. With the increase in digital money, people no longer trust banks and traditional forms of transactions. They now use digital money.
Digital money is any form of money or payment that only exists electronically. People can now pay for goods and services through mobile apps and cryptocurrencies. They do not even need physical money to pay for their services.
The rapid growth of digital services has become an indispensable part of banking operations. The industry needs to keep up with these changes for convenient services and customer retention. Hence, the finance sector is aggressively focusing on digitization. The industry is adopting new and emerging technologies for operational efficiencies. It is also enhancing speed-to-market and delivering superior customer experiences.
Banks are now cutting down spending on branches to invest in self-service digital channels to satisfy their customers. The use of digital wearable devices has made it increasingly feasible for banks to offer targeted services to customers. With this development, digital money can now involve credit cards, smartphones, apps, online banking, and money transfer platforms.
Collaboration with FinTech companies
The bank operation system is their most significant barrier to growth and technological innovation. Therefore, they want to exploit the opportunities presented by digitalization. Financial technology is indeed a disrupting force in the banking sector. So, most banks now work together with financial technology companies to build their digital experience.
FinTech specializes in developing technology solutions that help companies manage the financial aspects of their business. These include software development, applications, processes, and business models. Fintech companies have increased dramatically over the years, making it a multi-billion dollar industry globally..
FinTech was once seen as a competitor utilising the inability of the finance industry to keep up with technological breakthroughs. However, the partnerships between the two sectors are increasing today. FinTech now provides marketing, administration, and loan servicing for banks. These enabled banks to offer tech-enabled banking products. Banks are also discovering other advantages such as access to assets and customers. Therefore, these partnerships are reshaping the financial services landscape.
Emerging technologies such as AI and robotics are helping banks perform efficiently. Artificial Intelligence is one of the emerging trends estimated to grow. These full-fledged digitization performances have reduced costs and kept operating margins healthy.
Many banks are already experimenting with the use of AI in their operations. They have started using Artificial Intelligence robots for round-the-clock agile customer service. It has also reduced fraud and increased regulatory compliance. Artificial Intelligence is also triggering innovations and other innovations. These include biometric-based authentications, voice commerce, and Robo-advisors. This practice is still in its initial stage. But it will evolve and make its way to the general public in the future.
Unified Payment Interface
This emerging generation of consumers expects an easy banking system. They want a broad selection of banking features and benefits for personalised services. These features should allow them to choose transaction processes based on their circumstance, needs, and preferences.
The introduction of a unified payment interface has provided these services. UPI has been a trend in the last couple of years. It has revolutionised the way we pay and receive money. With UPI, transactions are done within seconds. These enable easy payment even when you are out of physical cash.
The development and introduction of technology like smartphones created easy access to your bank account. It allows the transfer of money from one person to another within seconds. Hence, customers now avail of banking services on their mobile phones.
These trends have reshaped the finance sector by bringing revolutionary changes to the traditional models. The industry is also growing its market share by building personalised experiences for its customers. Customers now are involved in stock trading and transfer money through their mobile app. The government is also showing great support for these trends.