Exploring the impact of Technology in Financial Services
Technology is vastly transforming our lives. Just like shopping, payments, bookings, work and many other activities are now digitized. the financial service institutions are increasingly embracing digital transformation (called “financial technology”, popularly referred to as FinTech) as the newest way to stay competitive and effective in the industry. New regulations, rising customer expectations and disruptors around every corner as prompt progressive financial services companies to be on the lookout for technologies that can improve efficiency and speed of service, as well as provide better customer experience.
Undoubtedly, one major area of concern in finance that has seen an exceptional solution from leveraging financial technology is Credit Risk Management. Credit Risk could simply be defined as the possibility of loss resulting from a borrower’s failure to repay a loan or meet contractual obligations on specified terms. Managing Credit Risk has, therefore, become a top priority in the financial industry as firms need to protect themselves from loss of economic capital and bankruptcy. Finance institutions and companies now adopts the intelligent dashboard and reporting templates in FinTech solutions such as BMAC; for accurate assessment of a potential borrower, at little or no cost, leading to a better-informed, data-backed decision before or after lending. Today, Digital banks and loan-issuing apps are expanding their client base by granting credit facilities to customers online with less worry about credit risk.
Before the evolution of technology, the method of collating, monitoring and protecting data against fraud patterns require complex and time-consuming investigations on a regular basis. In today’s tech-driven society, volumes of data, usually referred to as "big data" and its various sources are now effectively tracked by simple and smart controls in place. FinTech systems provides greater visibility of accounts and seamlessly reveal and prevent potential fraudulent activities at an overly reduced cost. Companies can identify abnormalities at the time they occur, rather than after the damage has been done.
To be successful in any venture, collaboration and connection is key. Today, the increasing demands of competition and customers for convenience and personalisation are transforming financial services- creating new opportunities for FinTechs to collaborate with traditional financial firms. Fintech solutions has come to revitalise the financial services customer journey by providing seamless win-win processes between financial firms and its customers (businesses). The future of financial services is in the hands of FinTech and traditional firms that can complement each other’s
Digitization of financial services is an ongoing revolution. It’s best for banks and other financial institutions to adopt digital strategies that will attract new-age customers and improve their experience.