What Fintech Industry Means For the Banking Sector

by fintech herald
Editorial & Advertiser disclosure

Financial technology is the latest innovation and technology that strive to compete more intensely with traditional financial instruments in the provision of financial solutions. Financial technology is simply a branch of engineering that uses financial instruments as a medium to carry out certain procedures. Financial technology is very much associated with the fields of banking, information systems, and information science. This emerging industry is basically an open area where new people are constantly being hired in order to increase the efficiency and quality of work in financial instruments. It is a rapidly growing industry, which uses cutting edge technologies to enhance various activities in financial services.

Banking fintech industry is flourishing due to several factors like high returns, reduced risk and leverage. The need for financial solutions in the banking sector has increased enormously especially after the global crisis. Many financial institutions had to face huge losses. In order to prevent such situations, sophisticated systems and software are designed to provide solutions for money management. With so many issues facing the financial service providers like bank charges, interest rates, credit limits and customers demands the banking sector needs to adopt new techniques and tools in order to survive in the cut-throat competition. It has been noticed that finance professionals who were involved in financial technology transfer their knowledge to the banking sector and start providing financial services from there.

The biggest challenge for the banks is to provide better customer service than what they had offered before. They have to retain the trust of their customers so that they can sustain their growing business. Fintech is a part of the traditional financial services industry and it also has to provide services that are unique and better than the traditional ones. Many banks are taking help from software developers and IT professionals to provide the best online banking solutions.

Internet has transformed every sector including the fintech industry. Most of the fintech companies innovation comes from the internet rather than from the traditional ways of doing things. This is one of the reasons that the industry has responded very well to the internet phenomenon. They have adopted an open approach to the new era of financial services and are focusing on providing solutions for every individual and organization.

Big companies spend millions of dollars every year on financial data processing and analysis. They need automation for their business processes and this led to the development of artificial intelligence (AI). Nowadays the banking industry is also adopting artificial intelligence for handling the day to day operations. Banking artificial intelligence system helps them make the best use of the data available and identify the best investment opportunities. They also conduct research and analysis to improve and streamline their whole process and provide the best customer service.

Another fintech industry that has benefitted from the emerging regtech innovation is the pharmaceutical industry. Their innovative approach to diagnose the diseases has helped to reduce the cost and increase the productivity of the healthcare industry. RegTech is used by the pharmaceutical industry to provide a platform for innovators and developers to build artificial intelligence applications which can help in managing clinical trials and research. The introduction of block chain technology has also been helpful for the industry. Block chain technology is a framework which helps to coordinate and monitor the supply chain activities of different entities involved in the manufacturing process.

The third largest industry which has adapted fintech innovations is the financial services sector. This is because the last few years have seen the growth of online banking, mobile money transfer and online investing. The popularity of these services has increased tremendously and the popularity of the entire financial services sector has grown over the past few years. With these services, the banks have been able to reduce their operational costs and improve their overall revenue collection. As a result of this, many banks are already operating in a more automated manner and hence incurring fewer losses.

Another fintech innovation emerging in the financial services sector is the ‘cloud computing’. Cloud computing refers to using the World Wide Web to process business activities. This is done by the back-end IT providers who manage the networks and storage resources of the organization. It works like an online environment where applications and data are stored on the server rather than being physically present in the offices. This allows for a better integration between back-end business applications and data from the user’s desk.

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