During the last few years, the financial sector has made huge transitions, coming up with new ways of serving its clients. What has streamlined these transitions is the rapid development and deployment of technology. Technology is a significant component of the finance sector these days, and fintech is the new, emerging, niche sector with massive monetary backing. One reason behind this landscape transformation is the consumer’s want for easier and faster banking. They want banks and financial institutes to eliminate the old and slow banking processes and replace them with new-age means.

And the finance sector is responding quickly with positive enthusiasm. Today, technology in the finance sector makes processes more accessible, improves communication, and increases efficiency. Above all, they are changing the way consumers see and transact money.

Let’s take a look at some of the latest fintech trends that are transforming the Finance sector.

Digital banking experience platforms

While such digital platforms are not new, the latest advances have allowed financial institutions to stir up the pot. One example is the hybrid cloud system (cloud/server) that provides consumers privacy and accessibility. Such hybrid platforms also make collecting real-time intelligent data like real-time digitization and advanced analytics achievable.

Another great example is the addition of API platforms that allow customers to integrate banking data into different apps. Such platforms encourage open banking, which, in turn, offers benefits like data sharing to third-party budgeting apps and employing monetary management tools. These features are often too costly for smaller financial institutions to offer through third parties.

Blockchain

Blockchain is the latest financial technology that is changing the finance world. You may recognize blockchain from cryptocurrencies and its association with Bitcoin. It is the base of Bitcoin, and major banks like JPMorgan Chase have been using it for a while now. According to several market experts, blockchain is the next big opportunity for banks and financial institutions to explore today.

While cryptocurrencies are hugely popular, thanks to some of our celebs, blockchain acceptance and usage are way behind. Some corporations are working on wider solutions, but most banks are applying blockchain solutions on their own.

Artificial Intelligence and Chatbots

Artificial Intelligence has increasingly found its way into our daily lives, and chatbots are the biggest example of AI. They have become a significant part of the digital transformation in the finance sector. AI is not just present at the frontend but is also helping in back-office, risk management, security, marketing, etc. Artificial intelligence is taking care of mundane processes like data entry, loan form processing, and complex tasks like risk evaluation.

With constant upgradation, AI is now also a vital part of risk mitigation and cyber-security. Since it is challenging to prevent cyber-security threats and attacks, institutes are using AI to conduct real-time analytics and monitoring. Once the AI has enough data, it creates prompt alerts when it flags something as a threat. AI is also a part of the KYC and the customer onboarding process. 

What is KYC? KYC stands for Know Your Customers, a practice that many banks and companies conduct to verify their customer’s identities in compliance with current regulations. It is a step that is widely accepted as part of a global fight against cyber threats and identity theft.

Concluding note

Technology and finance have increasingly become inseparable in the last few years. Somehow, most of the latest technology will find its use in the finance sector, and that is a good thing. As the pandemic has changed how we interact with each other these days, better fintech means a better way for people to interact with their money.