Nowadays, technology dominates the service sector. The role of technology in the working professional world is becoming more prominent, especially as everything is turning more digital.
In the previous century, several new technologies were born or came into the mainstream. Some of the technologies that we take for granted now were once considered new and revolutionary. The financial industry was also affected by these changes.
In this blog, we will overview the following are the top 10 emerging technologies in the financial industry in 2022.
Let’s first define what it means to provide financial services in the 21st century before we look at emerging technologies.
What is a Financial Service?
Everyone has a unique idea of what the financial services industry is. Some say it’s insurance, others say it’s about banks. And some say it’s much more than that. But what is it? And what does it entail?
One of the most critical and influential sectors of the economy are financial services. The financial services industry is primarily involved in taking care of individuals’ monetary needs. The term “financial services” refers to a broad class of more specific activities such as banking, investing, and insurance.
A financial service can be defined as an institution such as a bank, investment company, etc. As a financial service, these products are the goods, accounts, and investments that financial services firms offer. Indian financial markets are now trustworthy, transparent, and safe. It is widely considered to be the foundation of every economy.
Top 10 Emerging Technologies in the Financial Industry in 2022
The financial industry is the largest and most important industry in the world, and because of that, there is a lot of innovation taking place. In recent years, technology has also become more prevalent in the financial sector. And these technological advancements within the financial sector have doubled the investment and trust.
Here are the top 10 technologies that will change the financial industry in 2022:
- Cloud computing
Using cloud computing, banks and other financial institutions can provide 24/7 services while also storing data securely. Through their anytime and anywhere mode of operation, these financial institutions have a greater level of customer interoperability. You can explore all services and transactions without any hassle, which helps reduce the workload for you and your customers.
Emerging data analytics make all services more customer-friendly and accessible by predicting customer behaviour and customizing the product.
- Artificial Intelligence (AI) & Big Data
The service industry is headed for the future with the aid of artificial intelligence. Similarly, artificial intelligence has a broad impact on the financial sector.
Almost every day, the financial services industry produces huge amounts of data. Both customers and service providers use this data for their benefit. Whether it’s automating operations, managing compliance and risk, or making unbiased credit decisions, AI will have a huge impact on the way this industry operates. With the help of artificial intelligence, banking institutions can make informed financial decisions using a wealth of historical data. The real-time application of AI technologies allows the sorting of these data histories in the shortest amount of time. Globally as well as in India, AI job openings are on the rise.
Combined with artificial intelligence, big data helps detect hidden fraud patterns and manage risk. Furthermore, these insights help banks understand customer behaviour and create products and services that meet their needs.
The financial services industry is being transformed by the use of blockchain technology. As a result, services become transparent, cost-effective, and secure, as well as being more efficient. Blockchain technology is already being extensively utilized for reliable results in areas such as interbank transfers, fraud detection, and loan processing.
With blockchain technology set to take over the financial industry operations in the years to come, there will be clear guidelines on blockchain’s use in financial services.
- Robotic Process Automation (RPA)
A myriad of automation processes is designed to eliminate errors within financial systems as robotics revolutionizes the sector.
Among the most common technologies used by financial services to automate repetitive and fixed processes is robot process automation. At times, these algorithms integrate both structured and unstructured data. With this, it is possible to manage the increasing volume of data generated over time. RPA functions include recording logs, automating redundant tasks, and generating reports. The processed data is then uploaded to both apps and servers to ensure that users and providers of services always have the most current information.
- Mobile Banking
Mobile banking has advanced dramatically over the past decade. With the advent of SMS banking, you can now make digital payments and send and receive money from anywhere in the world with your smartphone. Furthermore, mobile banking provides an end-user interface to broaden the scope of Banking-as-a-Platform.
Digitalization has permeated every aspect of modern-day life. Financial services are no exception. Here, customer data can be compromised by cyberattacks due to its sensitive nature.
As technology advances, risks also increase. Cybersecurity has become increasingly important in the evolving financial industry. They ensure financial institutions’ safety and compliance with regulations.
Therefore, financial institutions constantly strive to increase cybersecurity by hiring reliable and efficient personnel. And creating a constant demand for Information security experts, security engineers, cybersecurity analysts & so on around the world.
Biometric technologies are the most trustworthy innovations ever when it comes to data security. Using fingerprints, retinas, faces, voice, and other unique features of a person helps banks protect their customers, prevent cybercrimes, and more.
- Conversational User Interface and Chatbots
An automated product that simulates a conversation with a human is called a conversational user interface. The interface responds to a variety of questions about the service in an interactive manner. When a customer asks a question, whose answer is already in the program, this program triggers pre-programmed keywords.
Chatbots are also turning the financial sector into a digital one. As an example of AI being utilized in this service industry, chatbots serve as an effective means of answering queries as well as handling backend tasks.
- Financial Inclusion
The most prominent method of getting rid of legacy banking systems that prevent growth and poor customer satisfaction is to partner with Fintech start-ups. These companies are assisting financial institutions in introducing tailored products and services to meet the exact needs of their clients by making smart use of emerging technology.
An umbrella term for digital banking experiences that are multi-faceted, cross-platform, and include trading, investments, and savings. Financial inclusion is accelerated through tie-ups with non-banking aggregators that provide services through apps such as Google Pay. Mobile wallets are fast and secure ways to handle digital payments via simplified means. Especially anyone living in a remote area or belonging to the lower social groups who needs access to instant payments on the go will benefit from these services.
- Open Banking Application Program Interfaces (APIs)
More than any other innovation, Open Banking Application Program Interfaces (APIs) will affect the traditional banking model. Open APIs enable banks to expose banking information to clients and partners and to provide them with access to expanded value chains and administrations. In addition, banks can maintain control of client information and guarantee the highest level of quality services through their platforms.
With the increase in automation coming from research and innovation, IT professionals have a better chance of finding employment within financial firms.
Hence, from building chatbots to apps and using AI to guide algorithms, such emerging technologies promise to improve services in many ways.
India’s financial sector has a bright future, making it an attractive career choice for young professionals.
Developing countries like ours are relying heavily on the financial sector as an engine of economic growth. Consequently, the opportunity to assist in this technological growth is immense.
We are in the midst of a period of monumental change, which is indeed a time to participate in.
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