The Emergence of ‘Fintech’ in the Banking Landscape
No matter how small or big an industry may seem when viewed from a myopic perspective, yet it abounds immense opportunities for the society at large, given the presence of technology as the key protagonist. For instance, the outbreak of the ‘dot com’ boom has served as one such watershed event that had redefined the ways in which technology could emerge as a cult transcending the conventional industry norms.
The aforementioned transition could also be witnessed within the framework of the Banking industry as well, in particular, which went through a complete structural overhaul no sooner than the term ‘Fintech’ was coined portraying technology as the conduit to avail financial services in the modern world.
Upon landing at the contemporary banking scenario, one could witness how Fintech companies are grappling with the legacy systems to cause a complete overturn in turning banking services more accessible to all with the least collusion. In this light, our today’s blog aims at drawing some eyeballs on the future technology trends that would probably render banking as future-proof. Let’s walk through a few of the technologies already making some ripples in the banking sector.
Key Technologies Causing Disruption in the Banking Sector?
1. Vetting on the Prospects of Quantum Computing:
Quantum computing has been on the cards for a few investment banking firms such as Mckinsey & Company, and E&Y, where they showed immense zeal for harnessing the technology for mitigating the risks associated with discharging credit. Vetting on the prowess of modern-day processors, banks may successfully ply them to weed out the prospective defaulters based on the advanced credit risk ratings.
2.Basking on the Glory of Blockchain technology:
The advent of blockchain technology turned the tables for a sluggish banking ecosystem, colluded with misdeeds of fraudulent money transactions, extortions, as well as a safe haven for tax evasion. The emergence of blockchain technology implied a parallel decentralized currency paradigm, unlike the types of fiat currency already in circulation, turning out as a silver bullet in projecting banking under the purview of law enforcement. Besides that, the decentralized ledger system of maintaining transactions would empower banking institutions in collating the transactional data to a shared resource eliminating any attempts of tampering.
3. Hopping to an Embedded Finance Ecosystem:
Before unearthing the technologies required for achieving this feat, it is pertinent to determine what stands for an embedded finance ecosystem. In this light, the term embedded finance has its roots in the domain of marketing where non-financial platforms are harnessed for pitching financial products and services. Hence, embarking into such an ecosystem would require banking institutions to migrate to an API-driven product platform. As per the findings of Forbes, two-thirds of financial institutions are still devoid of cloud-computing technology in their core operations.
4. Personalized Banking at the doorstep with AI:
Days are foregone when standing at bank’s long queues was the customary practice. With the onset of AI-enabled technologies, the unchartered territory of video banking has been tapped into in recent times. This would ensure an interactive customer experience with integrated remote-banking solutions. Similarly, disruption marked by AI can also be vetted through chatbots showing a great deal of empathy while offering reconciliatory services to the aggrieved consumers.
5. Leaning towards Cryptoficiation of Banks:
It may sound churlish, but that the reality that financial services are banking on the fortunes of cryptocurrencies can be corroborated by their innate desire to offer crypto-investment services. In addition to this, payment network giants are also treading towards setting forth crypto-enabled advisory services for their merchant and banking clients.
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