The fintech revolution is disrupting the finance sector and the banking industry as we know it. Fintech – short for financial technology, is used by many software development companies to design and deliver custom financial software solutions. Companies like TatvaSoft are proactive in offering services such as digital payments, artificial intelligence, blockchain, or chatbots, fintech offers a wide range of technology usages.
To a bigger or lesser extent, all of our lives are touched by fintech. And it isn’t limited to any particular section of technology. Its impact is spread over every industry including B2B, B2C, and C2C. Fintech is changing the way traditional financial services are undertaken. This helps in drastic improvements in customer experience not to mention the impact it creates on the revenues of the banking industry. In this blog, we are going to discuss how fintech impacts the financial sector.
Fintech is transforming the financial services industry. It can be noticed in many ways but here, we will take a quick look into the most profound changes fintech has implied in the financial service sector.
Complex financial transactions were always hard to handle but now you can process them very easily with the help of fintech. Settling down your account to the last cent seems to be a nightmare for accountants and experts in the financial services industry but it has now become a very easy process. They can now quickly set up and get running without any effort.
Though you may not realize it yet, faster processing of complex transactions helps financial institutions and traditional banks by freeing them from utilizing more resources behind the particular task. And this will improve the overall quality of the financial services resulting in attracting more and more people to get involved with the industry.
Millennials are the section that will always have the most modern needs of all age groups. So the insurers have to keep adapting along with the requirements of the millennials. Fintech has now enabled you by offering online procedures for all the tasks including customer support, filing claims, and applying. This process is way more smooth and easy than the approach of traditional banks.
I’m not exaggerating when I say that because some modern insurers are offering beneficiaries to make insurance claims with even mundane processes like making a call or texting a Whatsapp message. The documentation required would be very minimal and the beneficiaries can submit them all online. In this way, fintech is eliminating the option of visiting the insurer’s office again and again.
The enhancements in the customer experience and private data security are other examples of the impact of fintech on traditional banking services. Nowadays the increasing number of breaches and data theft has forced financial institutions and startups to take preventive measures against all kinds of cyberattacks.
The attacks have taught the banking industry a few lessons like below:
- The market players understand the importance of creating a “compliance culture” (a set of rules and standards) they are to follow early;
- Streamlined expansion implies that FinTechs compare the growth prospects and compliance capabilities;
- AML/KYC checks are integral elements of the internal structures of FinTechs enabling companies to vet and monitor clients.
According to financial experts, gaining the trust of their customers is the most important thing for fintech institutions and startups. To validate that trust, a fintech company needs to make sure that their technology works seamlessly and that they always act in customers’ best interests. Through such beliefs only, fintech organizations can cater to different customer requirements at any time.
The risks of unauthorized access to private information like personal financial data, digital wallets, bank accounts, and more have increased with time because fintech relies on mobile apps to provide banking and other financial services.
Increasing the strength of the application infrastructure and the usage of firewalls is the only option with fintech companies to offer better cybersecurity and enhanced customer experience. Also, they need to enable the cloud services with special measures and techniques to detect automated cyberattacks as well as protecting every kind of service on an individual level. The development of a robust architecture is needed to undertake this type of measure.
One of the most popular impacts of fintech on the finance industry is customer service chatbots. For a few years now, chatbots are gaining more and more attention through their ability to interact with customers as humanly as possible. Chatbots are nothing more than software that uses machine learning, artificial intelligence AI, and natural language processing to converse with customers on a website.
Chatbots are very efficient in managing the customers’ queries and directing them to the departments where their problems could be solved. Some AI-enabled chatbots can offer advice to their customers on certain topics like an investment. Some chatbots are placed on a website of a finance company to help visitors find what they are looking for. And some chatbots are built to perform mundane tasks like scanning emails. This task is completed by chatbots within mere 2 minutes whereas a human would take approximately 45 minutes to go through all the mails.
In this way, chatbots not only help financial institutions to cut their costs but also in increasing the efficiency of their work. This ultimately results in the improvements of customer experience by offering more value to them.
Digital banking solutions are used to provide B2B solutions, making it easy for the clients to realize what’s working for them from the financial services being provided to them. Most of the finance institutions nowadays are using SaaS to streamline, integrate and execute quality fintech services. The increased usage of fintech services also shows that it is easy for companies to manage their business with the help of fintech software solutions.
Mobile apps and digital banking services are some of the easiest ways for fintech companies to reach their customers. The application program interface is also initiated by some financial institutions so that their clients could be easily integrated with digital banking services and use some value-added fintech software solutions. Fintech has indeed made the process easy and hassle-free for businesses to reach their commercial customers.
More often mistakes can happen while managing accounts for high-profile clients or large business enterprises. Human errors are always noticed while processing salaries or other expenses but now with the help of financial software solutions companies could be more productive and efficient and that too for the long run. The increase of productivity results in the overall betterment of the attitude of employees towards the work which leads to an increased employee satisfaction rate. And as the cycle keeps on going, the happy employees are beneficial to bring great outcomes for the company. And all this has become possible only due to the adoption of financial technology.
Fintech technologies nowadays are used by banks to build a positive brand image by creating a lasting impact on the consumers. The number of Fintech startups is not only increasing but they are also seen to be helping their clients create an environment favorable to their client’s business. Using fintech solutions is also an effective way to stay ahead of your competition.
The name of the industry can change but the implementation of financial solutions in every sector suggests that its future is bright indeed. The same is true for fintech startups out there.