Major Tech Trends Redefining Finance

Finance experts are always looking for better ways to satisfy the needs of clients. Whether it’s making it easy for clients to deposit and monitor their investments or making payments seamless, the finance industry has always leveraged technology to reach its goals. It is, therefore, no wonder that innovations within the blockchain and fintech space is continuing to have an effect on the industry.

Redefining customer service

Gone are the days when it was just enough to put a cashier behind a counter and expect magic to happen. Financial experts across all industries are becoming more aware of the need to engage the customer at all levels possible. They are looking to optimize the customer experience, offering easy and more convenient solutions in order to turn them into brand ambassadors and returning customers.

Towards this end, financial solutions, whether it’s departments in other industries or within the banking sector, are becoming social. Chatbots, for example, offer real time support to website visitors.

Democratic banking

Inside the banking industry, players have become used to the idea of opening up customer information to third-party users. Through APIs especially, users are now able to access banking services, (both personal and investment), via other institutions like epayment providers.

Also, fintechs are taking advantage to integrate almost any form of service with the banking sector, and the bankers are all up for it, now that the paranoia has won off. Money management apps are no longer just limited to storing your data in the cloud, but are integrating with your bank and insurance providers.

Closer relationships

Banks used to be sacred spaces reserved for people within the industry. These days, there are collaborations across almost every industry, with fintechs leading the line. In Ghana and other African countries, mobile money interoperability is part of a larger plan to integrate mobile money wallets with bank accounts.

Telecommunication sector players have been heavy in this aspect, most especially MTN, the largest in Africa by number of subscribers. Globally, this collaboration could rise significantly. 75% of large banks will actively collaborate with fintechs to provide more solutions with open banking.

Mobile banking

In 2017, Ecobank sacked almost 200 of its contract staff in a bid to offer more digital services. In 2019, the trend towards digital services has continued to pick up. Bankers are offering banking services without the need of having customers physically present in the banking hall. Via text codes and USSDs, banks are able to create accounts for their clients, charge, deposit, and withdraw cash via their mobile money wallets, and even receive insurance products via text.

Mobile banking owes its growth to both internet penetration and smartphone proliferation, in Africa at least. As these two continue to grow, the trend within financial space will follow suit.

Cryptos are vague, blockchain is promising

It is still not known what will become of the crypto industry. The secure login process seems to have come under scrutiny with the QuadrigaCX debacle. Also, crypto-hacking has become a serious threat, raising concerns over how secured the individual platforms actually are. This is all in addition to the massive fall in the value of bitcoin over the last year alone. Despite JP Morgan announcing its own digital currency, it is safe to say the future of crypto is far from certain.

While the digital currencies receive scorn, the technology underpinning them keeps getting all the thumbs up. The latest is Germany’s decision to invite proposals on how to put blockchain to use in the broader German market.

Via the use of smart contracts, blockchain technology could also resolve some of the bottlenecks inherent in financial payments across different industries. Smart contracts are pieces of code that trigger specific offers or rewards if a signee to the contract meets specific requirements. It could be a land registry automatically updating ownership of a land title after payment is made into an account. This cuts out intermediaries, making business and financial transactions smooth and faster.

AI-powered brokers

Are the robots coming for our jobs? Probably not a straight forward answer, but artificial intelligence-powered bots are taking over mundane tasks in our workplaces. In the finance world, powerful codes are monitoring markets and giving the best advice on going long or short. Investment and wealth managers are freeing up their time by allowing AI to determine the best investment opportunities based on underlying financial data. At Lidya, a finance service startup in Nigeria, bots are running risk analysis on loan applicants. This is increasing the rate of success and also reducing default rates.

In fact, it has been predicted that robotic process automation in the financial industry will become widely adopted by 75% of industry players by end of 2019. The effect could be more efficiency or risky bets, depending on the regulations that will be developed to watch these systems. For the businesses involved, however, the chance to cut down overheads while increasing profit could be enticing enough. If they offer good value to customers in record time, industry players will not waste a moment snatching up the opportunity to deploy them.

Conclusion

Tech has shaped many things in the world. It has affected how people communicate and even made it easy to trigger the right dollar value for every second of the clock. In the world of finance, artificial intelligence and mobile technology are changing the trajectory of finance players. What was once a closed industry is now more open than ever. The reality is that it is going to become even more democratic and accurate, thanks in part to blockchain technology and the regulations underpinning it.