Experts have predicted that the global fintech market will reach staggering heights of over $37 billion in value by 2026. No wonder finance business leaders are clamouring to bolster their technological footprint and keep pace with the fintech revolution. Yet, what we see is just the tip of the iceberg. The fintech industry has a long way to go in its quest to redefine and shape our future.
As technology continues to advance at a rapid pace, the way we interact with money and financial services is changing. That translates into increasingly nuanced expectations of the modern-day customer. The only way for fintech entities to satisfy these demands and maintain a competitive edge is to embrace cutting-edge technologies rapidly. Many famous personalities in the field of finance have already hyped up the likes of artificial intelligence, blockchain and automation as the most urgent frontier in fintech.
In this article, we will look at seven of the most promising technologies that are set to transform the financial industry in the coming years.
7 Technologies that Finance Business Leaders Must Embrace to Unlock Fintech’s Future
Artificial intelligence for value creation and financial inclusion: Artificial intelligence (AI) is one of the most promising technologies that is set to transform the financial industry. By leveraging machine learning algorithms and natural language processing, AI can help financial institutions to better understand their customers and provide more personalised services. According to a report by Accenture, AI could add $1.2 trillion to the banking industry alone by 2035.
Speaking at Microsoft Future Ready in 2022, Sanjiv Bajaj, the Chairman and Managing Director of Bajaj Finserv and President of CII (2022-23), stressed the importance of financial companies to uproot legacy systems and get closer to the customers in this digital age using the cloud, big data and AI. As one of the top financial leaders in the industry, Sanjiv Bajaj has been a frontline adopter of technologies like AI and data analytics to develop more consumer-centric financial services. As a result, Bajaj Finserv has been able to drive mass adoption of digital finance across not only Tier-1 cities but also the underserved segments. AI plays a huge role in Bajaj Finserv’s ability to provide instant loan approvals, claim disbursals, and more.
Blockchain for new, robust financial protocols: Blockchain technology is popular for being the driver of new financial paradigms, such as cryptocurrencies. But it has many other potential use cases in the financial industry. Blockchain can be used to create new, more secure and transparent financial protocols, which can help reduce fraud and increase trust. According to a report by PwC, 40% of financial services companies have confidence in blockchain’s ability to transform service delivery radically.
Cloud computing for cost efficiency and workload transformation: Cloud computing is another technology that is set to transform the financial industry. By moving data and applications to the cloud, financial institutions can reduce costs, increase scalability, and improve security. According to Accenture, modern-day banks are already saving as much as 20% of their costs by running workloads on the cloud.
No wonder so many prevalent fintech organisations and famous personalities in the field of finance have embraced cloud computing for greater flexibility, agility, scalability, and speed to market. One prime example is Uday Kotak – the CEO of Kotak Mahindra Bank – under whose aegis the customer-centric bank has rapidly adopted cloud procedures in the previous four years. SaaS is now the bread and butter of their operations, enabling them to speed up digital transformation and serve customers better.
IoT for better transparency and trust: The Internet of Things (IoT) is set to play a major role in the future of fintech. By connecting devices and systems, IoT can help to increase transparency and trust in the financial industry. This can be especially useful for financial institutions that operate in remote locations or in emerging markets.
Automation all the way in: Hyper automation is a combination of automation, robotics, and AI that is set to replace manual work in the financial industry. By automating repetitive tasks, hyper-automation can increase efficiency, reduce costs, and improve accuracy. According to Juniper Research, banks and fintech firms will reap over $1.2 billion in revenue in 2023, thanks to Robotic Process Automation (RPA).
Automation is one big success mantra of fintech industry leader Harshil Mathur – the CEO of Razorpay. He has been a huge proponent of encouraging fintech start-ups to automate where possible in order to prevent the ballooning of the organisation’s workforce, even though the operations are small. Razorpay itself provides many automation solutions to vendors – from automating purchase orders to vendor payments and more.
Open source, SaaS and serverless for greater agility and scalability: Open source, Software as a Service (SaaS), and serverless computing are all technologies that are set to lower barriers to entry in the financial industry. By making it easier and cheaper for new players to enter the market and for established players to launch new products, these technologies can help to increase competition and drive innovation.
No-code and low-code for hyper-speed development: No-code and low-code platforms are redefining application development in the financial industry. These platforms allow developers to create applications without having to write complex code, which can help to speed up the development process and reduce costs.
Conclusion
From AI to blockchain, these fintech technologies have the potential to change the way we bank, invest, and manage our money. They can unlock the true potential of fintech by making financial services more secure, transparent, and personalised. They can also help to increase financial inclusion by reducing barriers to entry and making it easier for people in emerging markets to access financial services.
As these technologies continue to mature, it is clear that their impact on the financial industry will be significant, and fintech leaders who are willing to invest in them early on will be the ones to reap the rewards. By embracing these new technologies, fintech business leaders can stay ahead of the curve and gain a competitive advantage. Additionally, by implementing these technologies, you can help create a more efficient and user-friendly financial industry, which can ultimately benefit consumers. So, are you ready to embrace the future of fintech?
.png)
0 Comments