Two major challenges for financial services industry: first, keeping pace with rapidly snowballing technology and tools; second, meeting the flourishing customer demands.
Quite obvious, these challenges come as a part and parcel in every industry. However, the prospering technology boom in blockchain, cloud services, chatbots and others are fiercely sweeping and addressing these issues in one fell swoop.
To acclaim you with the prodigious innovation in banks that will change the face of fintech industry in next coming years, we have compiled a list of top ten technology forces captured from the PWC’s new research report.
Embrace these unprecedented technology trends and get ready for your next moves.
1. FinTech will drive the new business model
The convergence of financial services and technology, aka fintech, has become a disruptive force in short span of time following the same everlasting fad established financial institutions must quickly reconsider their business models or risk obsolescence in significant parts of the financial services value chain.
Fintech promises to address the growing expectations of consumers, who demand more personalized and simplified services, swift operations and greater value for their money.
2. The sharing economy will be embedded in every part of the financial system
The immense popularity of on-demand companies like Uber, Airbnb is a live example of flourishing ‘sharing economy’. It effortlessly narrates that people are becoming comfortable with the notion of peer to peer (P2P) economy, and find it extremely simple to directly deal with other people. To the same penchant, this notion of peer-to-peer (P2P) engagement is taking hold in a broad swath of industries including financial services. Leading examples being P2P payment technology! Results, the role of banks in consumer transactions will steadily decrease.
3. Blockchain will shake things up
Blockchain could make the financial services industry’s infrastructure much less expensive. Also, Blockchain systems could be far cheaper than existing platforms because they remove an entire layer of overhead dedicated to confirming authenticity. And not only this, the list of potential uses of Blockchain is also limitless, from financial transactions to automated contractual agreements and more.
4. Digital Becomes Mainstream
Branches would be obsolete, eliminating the pesky paper work while Blockchain, internet of things and wearables will be driving bank interactions. Reportedly 95% of transactions will be digital in 2020.
5. A bigger shift toward Internet of Things
With other developments, ‘Internet of Things’ will take a major leap. It will allow insurers to anticipate risks and customer demands with far greater precision than ever before. The winners will be able to price products based on a deeper understanding of risk; the losers will merely compete on price, compressing their margins with lower revenues and proportionately higher payouts.
6. Advances in robotics and AI will start a wave of ‘re-shoring’ and localization
Robots in the financial industry are looking far beyond basic bank-teller skill sets. New robots will now target social and emotional intelligence, natural language processing, logical reasoning, pattern recognition, physical sensors, and more.
By the year 2020, it is expected that robots and artificial intelligence will automate a considerable amount of underwriting and investment activity, especially in larger and more mature markets due to the massive availability of data.
7. The public cloud will become the dominant infrastructure model
The cloud will provide financial institutions with the scale, flexibility, and risk control that will enable them to tackle colossal changes, and also provide an agile IT infrastructure that will enable them to rapidly evolve as the finserv revolution.
8. Cyber-security will be one of the top risks facing financial institutions
Cyber-security is the leading challenge to the adoption of IoT technology because insecure interfaces increase the risk of unauthorized access. Some of the major concerns in IoT are Attack surface, Perimeter security, Privacy concerns, & Device management.
9. Asia will emerge as a key centre of technology-driven innovation
Pwc report says, around the world, the middle class is projected to grow by 180% between 2010 and 2040; By 2020, the majority share of the population considered ‘middle class’ is expected to shift from North America and Europe to Asia-Pacific. And over the next 30 years, some 1.8 billion people will move into cities, mostly in Africa and Asia, creating one of the most important new opportunities for financial institutions.
10. Regulators will turn to technology
The bank regulators will rely totally on technologies and rapidly adopt a wide range of data gathering and analytical tools. They will monitor the industry more effectively and predict potential problems instead of regulating after the fact.
If you are a bank regulator or a financial service provider looking to secure the services and match the pace with technology, Codiant can help you with needed financial app development services that perfectly resonate with your customer needs.