For decades, financial institutions and companies have been relying on static business models. The bookkeepers add entries in Excel whereas, banks use manual processes to incur day-to-day transactions. But today, the finance sector is finding itself confronted on all sides by innovative technologies. From blockchain technologies, cryptocurrencies to automated software solutions – the FinTech innovators are changing the shape of financial services.
It is also transforming and reshaping the way we access financial services. The digital and open banking models are making it effortless to send and receive money. At the same time, trading in stock markets has become more accessible than ever – all thanks to Artificial intelligence. In short, one could say that upcoming FinTech solutions are welcoming a paradigm for equitable financial services. In addition to reshaping the financial landscape, it would provide many benefits to the consumers.
If you seek to learn more about this, keep reading. Here we are highlighting the impact of technological advancements on the future of finance.
- Automated Software Solutions
Typically, accountants and finance managers create spreadsheets on Excel to prepare financial statements. It might seem like a viable approach to keep everything in one place, but it is not an effective one. After all, a slight change on a sheet can distort all the formulas. Therefore, many entrepreneurs have been thinking of switching to automated accounting solutions. These are online servers based on cloud technology, enabling data sharing.
Businesses can also connect their bank accounts to the software to import daily transactions. It would eliminate the need to hire bookkeepers since the software will automatically maintain records. However, working on accounting software, tech tools, and other automation solutions requires high-end accounting know-how. Today, setting foot in the finance industry requires professionals to remain abreast of the changing financial landscape. For that, you can explore eLearning programs to have a flexible learning experience. If you have a bachelor’s degree, you can opt for masters of accounting online to learn the ropes. It would equip you with the skillset needed to navigate the tech-savvy finance world.
- Accessible & Flexible Trading
Most people feel afraid to dip their toes in stock markets since they are not aware of trading practices. Well, the FinTech innovators are eliminating these barriers. Now, people can invest money with the help of Robo-advisors and E-trading applications. A Robo-Advisor asks every user for financial information, including credit score and risk appetite, to provide suitable trading choices. For people who don’t wish to take risks, advisors help them purchase a less-volatile stock that generates stable returns.
Moreover, they also allow individuals to take part in passive investing. It means people would be venturing into a broad universe of asset classes to keep up with the stock market. As soon as the stock price decreases, the Robo sends an alert to purchase the share through the E-trading application. Similarly, once the stock is performing well, the advisor will suggest selling it. In addition to earning lucrative returns, these trading strategies can help you make hefty premiums.
- Adoption of Cryptocurrency
After the global pandemic, the innovators saw an unpredicted upsurge in the popularity of cryptocurrencies. Even the mainstream financial companies started accepting payments through cryptos to facilitate users in the best possible way. To name a few, PayPal announced to allow US citizens to buy and sell currencies on its platform in November. With the growing popularity of crypto, more businesses are thinking of accepting this payment mode in the coming years.
Most brands would be integrating this payment option on their websites so that people can shop through cryptos. Besides this, the companies would also be introducing solutions to deal with crypto’s volatility to mitigate risk for consumers. It would encourage more people to use crypto, creating a cashless economy in the coming years.
- Strategic Data Integration
Believe it or not, customer data has always been integral for financial institutions. Banks lending money to people closely monitor their credit history and score to ensure they can repay the loan without any delays. As the world is becoming more interconnected, intelligent data tools will conduct an in-depth analysis of people’s social networking patterns. It would unfold how frequently borrowers shop and whether they pay bills timely, reflecting creditworthiness.
Moreover, strategic data integration is helping insurance companies with pricing decisions. Soon, they would be collaborating with fitness tracking companies before quoting a premium for health insurance. People with an active lifestyle and a healthy regime would qualify for lower rates because the chances of health problems are low. This prudent risk management approach will improve efficiency in the finance sector.
- Business Intelligence in Banking Industry
With rising reliance on technology, the banking industry will leverage business intelligence to ensure optimal performance. It provides accurate, function-specific, and unbiased insights about customers. It has AI-enabled servers that use current and historical banking trends to recommend strategies for improving efficiency.
Above all, business intelligence can detect fraudulent activities in minutes, mitigating the chances of losses. It assesses client’s payment patterns by matching them with past trends. In case of odd behavior, they send an alert. For instance, a person who withdraws almost $2000 from a credit card takes out $35000 suddenly; the software will alert the authorities. It would be an indicator that the credit card has gotten compromised or stolen.
The up-and-coming technological advancements are bringing drastic changes to the financial landscape. Many companies have already jumped on FinTech, while others are still finding their way. After all, these technological advances will continue to facilitate financial services. From introducing a new payment mode to strategic data integration – technology is doing wonders in the finance industry.