Technologies Reshaping the FinTech Industry
some of the key technologies will drive business model reinventions and shape the competitive environment of the financial industry over the coming years.
Fremont, CA: Fintech development is driven by technological advances and innovation, which will continue to generate disruptive business models in financial services. Traditional financial institutions will have to use all of their resources to stay on top of the looming wave of financial industry upheaval in the future.
Here are some of the technologies that are reshaping the FinTech industry:
Artificial intelligence (AI) has the potential to add $1 trillion to the global banking industry each year. Banks and other financial institutions are expected to embrace an AI-first approach, which will better position them to fend off technological encroachment on their turf. Automatic factor discovery, or the machine-based identification of the elements that drive outperformance, will become increasingly common in financial services, assisting in the refinement of financial modeling across the industry.
Cloud computing frees financial firms from non-core activities like IT infrastructure and data centers while also allowing them to use more flexible storage and computing services at a cheaper cost. At the same time, new cloud-based formats such as open banking and banking-as-a-service are shaking up the traditional customer-financial-service provider relationship. Financial institutions will continue to rely on the cloud as they add more agile capabilities and establish new businesses that require high market and customer responsiveness as well as scalability options.
In banking, IoT-based inventory and property financing, which combines IoT with blockchain, is improving risk management by verifying that accounting records match real-world transactions, allowing for a brand new system of trust. IoT is shaking up traditional trade finance in shipping and logistics, allowing banks to build new products based on commodities movement trackings, such as on-demand liquidity and other smart contract-based innovations. Another way that IoT is bringing banks closer to their clients is through embedding banking services into wearables, such as digital payments.
Automation replaces manual labor, which not only improves productivity but also minimizes human error and allows businesses to respond to demand variations. While RPA is currently well-established among major financial institutions, it is projected to spread further across the industry. Robots that mimic human movements for basic paperwork and decision-making, for example, have the potential to automate almost 60 percent of accounts payable procedures.