Fintech technology is booming and shaping the global financial system. The finance world will no longer be investment firms working off in-person advice and as financial innovators race to reach the market demands. Many fledgling businesses continue to shape the future of fintech trends and products in the industry. With the digital transformation approach, not only fintech created innovative ideas for interacting with potential customers but also emerged as an upgraded lifestyle for most millennials today.
Fintech is no longer jargon for the banking sector but now it is a relative term in technology in general. More than 70% of bank executives recognize customer banking as one of the most likely to be deranged by Fintech.
But have you ever wondered, what if the fintech sector continues to develop at breakneck speed? Does it mean the traditional banking ends here?
In this blog, we’re going to know how do financial services impact the bank sectors. So, without any further ado, let’s get started!
How does Fintech Affect Banks?
Fintech in the banking industry addresses many innovations and one of them is biometric sensors. Biometric sensors and Iris scanners both are technological advancements that automated teller machines are observing. Besides, these tech advancements are ground-breaking since they would simply eradicate the requirement to carry your plastic card. Moreover, you’re not required to remember your pin.
Apart from providing convenience and ease of working, these technological advancements will also create ATMs more securely and it will allow you to access your own account without entering a password. These biometric censored ATMs use desegregated mobile appliances, fingerprint scanners, and eye recognition to identify the owner of the account.
Utilizing biometric technology introduces a huge sigh of relief for all the consumers who lost their ATM cards because now they can access their funds even when they don’t have their card.
Customer service chatbots
In recent years, fintech also introduced customer service chatbots that are bits of software created using machine learning that allows them to constantly learn from human interventions. Chatbots are efficiently used to streamline customer interactions such as handling queries and guiding customers to the required departments. They can perform various tasks which provide investment advice to their customers.
The rapidly growing technological advancements and innovation, chatbots have become an integral part of the banking industry that improves customer satisfaction and call agents to focus on additional value.
The usage of smartphones is rapidly increasing and it forces the banking sectors to come up with mobile applications that provide Fintech services to its customers. Many banks have their own mobile applications which have a user-friendly interface. These mobile apps also have fingerprint recognition features for the user and the application functions without any biometric hardware.
You can quickly access funds using a mobile application and perform various banking functions such as checking account balance, check deposit, pay bills, and much more.
Undoubtedly, Artificial intelligence and digital transformation are booming in traditional business. It has become an integral part of the financial-banking sector. The software solutions that banking industry uses for fraud detection generates alerts when any fraudulent transaction is done in the system. After generating alerts, it is backed up by the investigation and determines whether the attack was real or fake. To prevent customer data and cookies, banks are now adopting AI technology.
McKinsey says that adopting machine learning-driven statistical modeling and process automation can transform the AML tasks by implementing new efficiencies and innovations.
For instance, various data aggregation platforms can manage data and unstructured transactions for offering a 360-degree customer view. By implementing machine learning algorithms, banking sectors can leverage historical data and determine patterns of a fraud attack which will reduce human interventional up to 50%.
Fintech services are transforming the entire banking industry from a branching process to digital channels which reduces the bank’s dependency and affected mortar branches to function.
We can see that many banks are reducing their branches by adopting omnichannel banking services. You’ll be surprised to know that more than 9000 bank branches were shut down only in the European Union by the end of 2016.
Is FinTech worth the investment?
There comes various challenges that should be taken into account while implementing fintech services. But undoubtedly, it offers excellent potential to the banking industry to lower their operating costs and offer better services to their customers. If you’re not walking with the tech trends and the rising demand for fintech, you might lack behind the advances of your competitors. The fintech industry is affecting the banking sector is imminent, it depends on the bank to decide how they’ll evolve in the advances to meet their customer needs.
Businesses specializing platform in fintechs technology are incumbents in the financial industry in many ways. Various advantages enable more innovation and deliver service to their customers more quickly compared to traditional banking sectors do.
The Bottom Line
The advances in innovations and the cutting-edge digital technologies coupled with customers’ demand for user-friendly banking experiences leads financial services to readily grasp the fintech technology. Today, fintech includes everything that we just mentioned in this blog. In the future, fintech is all set to become even bigger with retail banking software and other components coming under it. Only time can predict how fintech will affect the banking sector and the world in the future, but soon technology will rule finance. If you’re still unaware of the impact on the banking sector by fintech development, then you’re probably lagging.