Financial services often represent a more conservative and traditionalist segment of the business world, not being in a hurry to adopt the new developments until they have been thoroughly tested out. However, it seems that more and more representatives of the industry decide to embrace the change and usher in the new age. In this article, we will cover how exactly this happens and what are the most telltale signs of this process.
1. Scaling up
Giving people easy online access to the services means dealing with a far greater number of transactions in a unit of time, which means a far greater strain on the company infrastructure. In order to avoid downtime and be able to process this multitude of new transactions, companies need to improve their infrastructure and be ready for short-term rapid increases in this strain.
2. Growing importance of cryptocurrencies
The days when cryptocurrencies maintained a precarious existence on the fringe of the financial world with most people keeping well away from them are long past. Today they are perceived as legitimate, highly convenient, and useful tools that anybody can use for a variety of purposes, from carrying out everyday financial transactions to making investments.
You don’t even have to obtain any special knowledge to do it – today there are plenty of financial services that allow you to trade Ripple CFDs and other major cryptocurrencies without spending any time getting to know the technical side of things. It is as simple as creating an account on one such service and starting out.
Biometrics (voice, facial, and fingerprint identification of clients) is becoming an increasingly important part in procedures carried out by financial institutions. It is more than likely that here we see the future of the industry – biometrical identification dramatically decreases the likelihood of forgery and increases the security of transactions exponentially. In the years to come, this is likely to become mainstream, and companies that don’t make this transition will be seen as unsafe and outdated.
Automation plays a vital role in many areas of work carried out by financial services providers, but one of the most important is proactive outreach. According to a recent study, no less than 85% of people using bank services would agree to pay a regular fee to receive social media notifications from their bank.
Everybody seems to be talking about Big Data these days, and financial service providers are jumping on the bandwagon as well. The final goal of data analytics is to give an organization an opportunity to fully understand what each individual customer wants without using the crutches of dividing them into demographics. Of course, financial institutions have been gathering all kinds of data about their customers for a long time, but only the recent breakthroughs in the field of Big Data make the possibility to analyze and use all this information viable efficiently.
6. Artificial intelligence
Although true self-aware artificial intelligence seems to be a long way off yet, businesses across all industries actively employ the already existing results in this sphere. They are still rudimentary, but there is no doubt that next-gen banking and financial services are going to actively used AI-based systems to profile their customers, analyze their moods, give them financial advice. Gartner goes as far as stating that wealth management firms that fail to start using AI advisors by 2021 are going to lose about 30% in investment management revenue.
7. Data sharing and integration
In order to better understand and predict the needs and requirements of individual customers, organizations are going to need a new degree of data collection and sharing. This can take the form of a real-time data repository that multiple employees would be capable of accessing at any given time. If multiple teams share information among themselves, it will drastically improve their overall efficiency and level of understanding of the current situation.
The digital transformation of financial services is just as disruptive as it is for any other industry – even more so if you take into account the traditionally conservative stance this industry takes. However, in our times there is no other way but to evolve in this direction.
For more on this topic, see “Finance Is Set To Gain Digital Transformation Momentum.”