Digital Transformation for the Financial Sector
Updated On October 3, 2023 | by Joseph Williams
Growing Interest in Fintech
Technology has changed almost every aspect of our lives, and it is also gradually taking over the financial sector. Financial technology (fintech) has become the buzz phrase in the financial sector in recent years, as many customers are leaning towards making use of institutions that are implementing technology solutions and providing convenience. Fintech is now reportedly a multi-billion-dollar industry, particularly considering that the new generation is tech-savvy and heavily dependent on technology for everyday operations and transactions. Furthermore, in light of the growing interest in forex and stock trading, the demand for online trading platforms has increased. Naturally, people are always looking to make use of the most secure forex trading platforms, to avoid possibly falling prey to the numerous scams and fraudulent activity that exists, given the advent of technology and the alternatives to traditional banking means.
It is important to note, however, that fintech did not gain popularity overnight; the process occurred over many years. For example, the introduction of debit and credit cards was a way of reducing the safety risks and concerns associated with carrying physical cash, but it is also one of the earlier examples of fintech in banking. Thereafter, ATMs were introduced and the banking industry subsequently made use of more digital solutions and systems. These digital solutions and systems are inclusive of digital banking and e-commerce.
How Digital Operations are Changing Financial Industry
The USA is said to be the biggest investor in fintech currently, with its 2020 contribution estimated at $22 billion. However, that is not to say that other countries are not invested in fintech, as it is undoubtedly fast becoming a global phenomenon. Industry reports also reveal that the financial sector has been trying to incorporate artificial intelligence into its operations as well. Although some people are against AI and automation in banking especially, because of the employment risks it poses and people being replaced by robots, many institutions see merit in it. This is particularly true for repetitive and routine operations that do not necessarily require human thought or intervention. When you consider online web interactions, bots have become the norm and respond to queries and concerns through predetermined inputs and guidance on customers’ frequently asked questions.
Apart from the banking sector, fintech has infiltrated the financial industry as a whole and is evident in the insurance industry too. For example, applying for insurance has never been easier, manual processes such as having to physically go and submit your forms and documents are no more, nowadays, insurance companies encourage online applications. Given that fintech has become the backbone of the financial sector, and has led to much innovation within the industry, it is expected to grow even further in the coming years. Therefore, to fully enjoy the benefits of technological developments and convenience, people are encouraged to embrace the change and welcome the various ways in which it is making everyday life much easier. Moreover, fintech has provided a new world of opportunities for entrepreneurs and start-ups that focus on technology because of the growing demand and evident interest in it.
Next, you may like to read: How the Insurance Industry is Being Transformed by Digital Transformation