Source: Pixabay
Also On TechBooky
Block Stock Soars 16% on Strong Earnings, Analyst Upgrades
Global Reputation Forum Honours Excellence In World Fintech, Banking Industry Leaders’ Convergence
Nigerian Banks and Neobanks Clash, Consumers Caught in the Crossfire
Unveiling The Alleged Scam: A Deep Dive Into Tingo’s Troubling Journey
Trading With The Awesome Oscillator
It’s no secret that the financial industry is old and slow. Dominated by global multinationals –the HSBCs, Goldman Sachs and PricewaterhouseCoopers– there is very little incentive to innovate or make vast improvements to service, because customers do not have manyalternatives to choose from. Or do they? This was the case until very recently, but in the mid-2010s something began to shift. And it has the potential to be seismic in proportion. Enter fintech and its effects on the way both businesses and individuals manage their money.
Banks
Banks are essentially the shop window of the financial industry. Most of us interact with them on a regular basis, much more often than the back of the shop that includes insurance, pensions and other products. 69% of the global population has a bank account of some kind, but it seems that people aren’t happy with the service they’re getting. In 2019,more than a million people switched bank accounts in the UK alone. Many established banks lost thousands of customers, but a few new players scooped up these unsatisfied customers and showed them that there could be an alternative. According to reports,Monzo Bank gained over 20,000 new customers and Starling Bank gained nearly 11,000. The link? They’re both app-based banks, part of a trend that is promising to revolutionise the banking industry. Their fees and processes are explained clearly and put out in the open, and everything can be done from their apps, so customers need never queue in a bank store again.
Mortgages
Source: Pixabay
Mortgages are another incredibly slow process that many potential buyers can get overwhelmed by. There’s a lot of choice, but every lender says they’re the best, and impartial advice can be expensive. The internet comes to the rescue, though. Independent online brokers like Trussle are offering mortgage advice online at no cost. This is yet another online-only company that makes the process simple and easy for consumers looking for finance-related advice and services.Visitors to the platform can use online calculators to work out how much they could borrow and their repayments, before chatting with an independent expert to work out what is best for them. Many millennials are starting tobuy property, and this new online-based way of getting advice suits them because they’ve grown up with online communication, which they often find preferable to phone calls.
Digital Wallets
Like banks, but not quite, digital wallets are yet another trend that’s been growing stronger and stronger in the financial world, ever since 1998, when PayPal was created. Skrill and Venmo allow users to make seamless payments to both businesses and individuals anywhere in the world, and they’re usually free of charge. In 2017, 28% of all online transactions in the US were made using digital wallets and the industry is predicted to be worth $7,580 billion by 2027. Sending money to friends, especially in other parts of the world, used to be quite a hassle. The process was slow, and there were often fees associated with doing it. Yet, seeing an opportunity, these digital wallet start-ups took the chance to shake up the industry. In more recent years, digital wallets have introduced several additional conveniences and services that bring them a long way from the simple, barebones PayPal of 22 years ago.
Whether it’s to bring convenience or speed, or to simply reduce costs, it would seem that technology is having a major impact on the financial industry. Driven by a younger generation’s craving for simplicity and convenience, and powered by that same generation’s better understanding of new technologies, the digital financial revolution is growing stronger by the day.
Related Posts:
- Fintechs Could Be Banks’ Biggest Rivals In Years To…
- The UK's Financial Conduct Authority Says Challenger…
- US Fintech Plaid Hires Bookings.com's Executive To…
- Although Similarities Between Them Seem To Be On The…
- Jumo Partners With MTN And MANSA Bank To Provide…
- Sparkle Raises $3.1 Million To Scale Its Operations…
- FinTech Companies And The Need To Reposition…
- Africa’s Biggest Fintech And How They’re Pushing…
Tags: bankingdigital bankingfinancefintech
FAQs
Technology has completely transformed how finance functions work, making it an essential part of the finance industry. It has revolutionised every element of finance, encompassing continuous accounting, automated systems, advanced analytics, data quality, and even how transactions are carried out.
What are the disruptive technologies in the finance industry? ›
Blockchain, Generative AI (artificial intelligence), machine learning, and other emerging technologies have the potential to revolutionize the financial services and banking industry in ways that were impossible to predict.
What are the disadvantages of technology in finance? ›
Disadvantages of Fintech:
- Security risks: Fintech companies may be more vulnerable to cyber-attacks and other. ...
- Lack of human interaction: Fintech companies often rely on technology to provide their. ...
- Limited product offerings: Fintech companies may not offer the same range of financial.
Impact on Financial Stability
The widespread adoption of AI in the financial sector can have implications for financial stability. AI algorithms may amplify market dynamics, leading to increased volatility or systemic risks.
Will technology take over finance? ›
AI is unlikely to completely replace finance jobs, but it will significantly impact the field. Here's a breakdown of how AI will likely transform finance professions: Tasks replaced by AI: Repetitive tasks: AI excels at automating repetitive tasks like data entry, bookkeeping, and basic financial analysis.
How will technology disrupt financial accounting? ›
Compliance will be increasingly automated going forward, and limited advisory services will follow that trend. Automated processes can provide the bulk of services with oversight, while accounting professionals will focus on offering expert advice and insight, strengthening customer relationships in the process.
How is technology disrupting the banking industry? ›
The use of algorithms, big data, blockchain, peer-to-peer lending and crowdsourcing, means that the role of the intermediary is changing: banks now face competition from other intermediaries in their core business.
How technology is disrupting banking? ›
Access: Digital disruptions enable banks to expand their reach beyond traditional geographical boundaries. Through digital platforms, banks can provide services to customers globally, facilitating cross-border transactions, international remittances and increase revenue potential for banks.
What is the most disruptive technology today? ›
10 Examples of Disruptive Technology
- Generative AI. Generative AI is a type of artificial intelligence that uses generative models to create content. ...
- Edge Computing. ...
- Blockchain. ...
- Robotics. ...
- Green Tech. ...
- 3D Printing.
Technology risk (also known as information technology risk) is a type of business risk defined as the potential for a technology failure to disrupt a business.
Disadvantages of new technology include:
- increased dependency on technology.
- often large costs involved with using the latest technology (especially for small businesses)
- increased risk of job cuts.
- closure of high street stores in favour of online business.
- security risk in relation to data and fraud.
It has increased data accuracy, human efficiency, enhanced real time data exchange and risk management and reduced costs. However, there have also been some negative impacts such as redundancy of basic accounting roles, increased data security threats, increased set up and training costs.
Is finance going to be replaced by AI? ›
Not to mention, human financial analysts bring creativity and critical thinking AI doesn't tend to possess. So, it is unlikely that AI will fully replace financial analysts, or at least any time in the near future. Instead, they may work together to improve efficiency and accuracy in decision-making processes.
Is finance in danger of AI? ›
Those reports came just weeks after the Financial Stability Oversight Council in Washington said AI could result in “direct consumer harm” and Gary Gensler, the chairman of the Securities and Exchange Commission (SEC), warned publicly of the threat to financial stability from numerous investment firms relying on ...
Will financial advisors be replaced by AI? ›
These days, people don't just need help mixing ETFs into a portfolio—they also have to make hard choices about savings, insurance and debt management, among other things. But while AI can do some things as well as a financial adviser, and sometimes can even perform better, it can't replace human advisers.
How does technology play a role in finance? ›
With digital payments, online banking, analytics, and reporting, banks (or other institutions) can now prepare much better investment opportunities for each individual. They know precisely how much money we have, what we spend, and our risk willingness.
How has technology impacted the banking industry? ›
Technology geared toward improving retail banks' operational efficiency is positively impacting the market. According to Insider Intelligence, 39% of retail banking executives say that reducing costs is where technology has the greatest impact, compared to only 24% who say it's improving customer experience.
How has technology affected the banking industry? ›
(2)Banking process is faster than before and more reliable. Maintenance and retrieval of documents and records have become much faster and easier. (3) Computerized banking also improves the core banking system. With a core banking system, all branches have access to common centralized data and are interconnected.
