Over the previous two decades, technological upheavals have altered how we interact, converse, shop, and conduct business. Consumers’ interactions with their money, what they expect from financial institutions, and how those institutions work have all been challenged by emerging technology in the financial services business. New technologies are making operations easier, and more efficient, reducing errors, improving communication, and changing the way people think about and interact with money.
Most importantly, these technologies can greatly help financial institutions. Chatbots and automation, for example, are emerging technologies in the financial services business that cut man-hours, improve client connections, and increase profitability. While the influence of new technology on financial services may vary depending on the function, many of them are expected to be adaptable and beneficial.
If they haven’t already, expect these developing technologies for financial services to become a part of your institution’s IT stack.
Automation in Financial Services
RPA, or robotic process automation, is the most widely utilized tool for automating fixed and repetitive procedures. Automation, unlike AI, relies on a simple set of rules to get predictable results. To handle digitalization, approval, risk flagging, and other tasks, these pre-programmed rules can include structured or unstructured data. Many also incorporate learning patterns, allowing them to improve over time as more data is collected.
RPAs are typically used to generate reports, log data, automate repetitive procedures, and keep track of logs. RPA, for example, can handle quick payments by employing a pre-programmed rule to approve payments automatically if all circumstances are met. Another RPA would then document the transaction, move it to a larger file, and update the data across any apps and servers that use it.
RPA and other financial technology innovations help banks save money, reduce human error, and speed up operations. Customers benefit as well because they don’t have to wait as long for approval from a human.
Digital Experience Platforms For Banks
Although digital experience platforms are not new, modern technologies are allowing financial institutions to change an industry that is still relatively new. Hybrid cloud (cloud/server) solutions, for example, provide consumers with both privacy and accessibility. Real-time intelligent data integration, such as real-time digitization, personalization, and advanced analytics, is also possible with hybrid systems.
The emergence of API platforms, which allow users to link their banking data to other apps and vice versa, is one of the most significant of these advances. More financial institutions have battled API, but now that the EU has mandated open API, many organizations in the United States are following suit.
Blockchain is an emerging financial services technology trend that is revolutionizing the financial world as we know it, yet adoption is currently modest. Blockchain is the technology that underpins Bitcoin and has been adopted by major financial institutions such as JP Morgan Chase. It is widely recognized as one of the most promising areas for banks and other financial institutions today. Investment banks, for example, could save $10 billion if they moved their clearing and settlement processes to the blockchain, according to Accenture.
Chatbots and Artificial Intelligence
Chatbots and other artificial intelligence solutions are becoming an increasingly important aspect of the banking industry’s digital transformation. They are widely used by financial institutions of all sizes, with everyone from giant banks to small credit unions using them. While chatbots are the most obvious form of artificial intelligence, AI also has an impact on back-office operations, product delivery, risk management, marketing, and security.
Simple algorithms are used by machines to handle anything from data entry to risk appraisal to loan form processing, saving major banks hundreds of thousands of employee hours. Smaller banks can take advantage of these growing technologies in the financial services business, which include solutions to automate certain operations including documentation, data exchange, data analysis, customer communication, and more.