There is a substantial evolution unfolding in the financial services industry, covered in a single abbreviated word i.e. Fintech.
Fintech is an extensive word that has connected with the application of technological innovation in the financial services industry. While the demonstration of technology has always had an impact on financial services – as it has on other industries – fintech is forcing a fast development in the sector, as disruptive advancement like blockchain has forged new ways, changing the prospect of finance.
Especially, two technologies that are gaining the interest of both the business world and the public at large are artificial intelligence and blockchain:
Commonly called AI that refers to the “capability of a digital computer or computer-controlled robot for performing tasks generally linked with intelligent beings.” Artificial Intelligence can already be available in numerous everyday applications, particularly in two key areas: customer service, and process automation.
The traditional plan of standing in line at a brick-and-mortar bank is vanishing – rapidly. Fintech companies have been developing sophisticated ways of interacting with their customers, with no need for direct human interference: chatbots. These programs change the conventional customer service role with a combination of dedicated AI applications, called machine learning (ML), and natural language processing (NLP); the latter permits the program to comprehend human language, while the previous permits it to better react to queries over time.
A huge amount of the function time of a finance company is spent copying things, very often physically – according to a report by Anthony Constantinou CEO of CWM FX, up to 80% of a distinctive financial planning and analytics professional’s time is taken up with these kinds of activities.
Automating these processes provides the possibility for a more professional, and profitable, use of these dedicated roles, which is why companies are accepting robotic process automation (RPA).
In this case, the robot is not a physical being; instead, it refers to software that can rapidly and professionally perform a dedicated task within suggested parameters, and at a very high volume. This makes it ideal for various conventional manpower-heavy tasks such as data entry and extraction, executing rules-based tasks, forming, copying, or integrating databases, handling approvals and checks, etc.
Artificial Intelligence-based systems like RPA and chatbots make the everyday operation of financial corporations more efficient, but there is one more commonly discussed financial innovation that possibly has a broad consequence for the industry i.e. the blockchain.
Blockchain in Finance
Since its remarkable hand in the increase of cryptocurrencies (through the formation of Bitcoin), the unchallengeable ledger known as blockchain has come under study by a business world dying to utilize the possibilities it seems to offer.
The attraction with blockchain comes down to various key characteristics of the technology: It works as a continuous, cryptographic ledger, wherein new information can be added without changing or replacing the old information in any way. Blockchain is even a consensus-driven technology, where adding to the network needs the solution of a mathematical proof, which is confirmed but every other computer, or node, on the network.
These two factors have various crucial implications for the use of blockchain. The cryptographic character of the technology offers its natural security, and because earlier entries cannot be edited without canceling the whole data set, it’s able to function with the need for conviction; this is further backed up by the consensus-driven character of the blockchain. It is even decentralized which adds another layer of security.
There is a final screw-up: blockchains are public by character, and open to looking for, at the least, any member in the system. This created the “trustless” character of blockchain; since everyone can view all transactions on the ledger.
The future of the financial service industry seems promising: the advancement of new technologies such as Artificial Intelligence and blockchain is enabling a bigger scope to serve customers competently and precisely.
While this hasn’t taken place without some chaos, a glance forward in time shows the potential of technology to get new safety to consumers, and bigger profitability to business – so for a long, the big lessons must be taken into account.