This article was written by Paul Rowarth of Business IT Support company, 5th Utility. Paul is head of research and development at 5th Utility.
In the industry of financial services, the mobile sector is full-steam ahead. The financial technology is finding new ways to make investing, managing, and spending money easier than ever before. From Apple Pay to Venmo, more consumers are moving to digital deposits, digital currency and even digital investing. The financial technology is transforming the world and forcing the entire industry to rethink the concept of brick and mortar stores.
This change is very fast. If there was a time when people used to check books to make a purchase, transactions today rarely need a signature or ID. There are modern brick and mortar stores such as Amazon Go when there aren’t any checkout lines. Customers let AI do the work and simply walk out the door with the chosen products. Lately, the number of physical banks has dropped significantly and you may have a difficult time finding a local branch. This is mostly due to the increasing use of mobile and online banking services. Many users are doing more than just going online for their banking transactions. They are finding mobile “financial wellness platforms” that allow them to crowd-fund, bank, budget, and pay without leaving their homes. This means that, when it comes to financial management, banks are no longer the only option. Many other companies provide investing, lending and saving services much cheaper, easier, and faster than the former financial institutions.
The blockchain is among the financial technologies that have the most potential impact in changing the world. It is the technology behind the development of various digital currencies such as Bitcoin. But blockchain technology can be used in much more applications than just digital payments. It allows for safe and secure trading of almost anything from money to royalty fees, copyrights, or ideas. Blockchain eliminates the necessity for the existence of a middle man to manage or facilitate the transaction. Among its applications are real estate, investment management and more. One of its best advantages is that it comes with limited security risk and it can all be done virtually. Several industry groups started to commercialize and apply technology to various financial services as FinTech and blockchain move from focusing on retail to a more institutional use. Blockchain’s use will soon become an essential aspect of technology used by financial institutions’ operational infrastructure. The financial technology is also eliminating the need for physical currency.
Bitcoin is a digital currency that is not government backed by any nation. It has proven that, in order to exist in the financial world, currency no longer needs a government backer. FinTech is driving this new business model. Disruptors such as startups and fast-moving companies are focusing on promoting innovative technology in everything from insurance to mobile payments. Unprecedented advances in efficiency have been made possible due to large technology investments. The digital agenda extends from operational efficiency and customer experience to analytics and big data. This approach has been applied in financial services to retail banking, payments, wealth management, and insurance. The new trends expand it toward some new institutional areas such as commercial banking and capital markets.
It’s fantastic to see Fintech transforming the world as we know it, but for businesses operating in this space, they need to place priority on ensuring security standards are not only met, but exceeded.