Financial technology is the new technology and innovation which aims to replace traditional financial procedures in the provision of financial services at a lower cost. It is an evolving industry which makes use of advanced technology to enhance financial activities in banking. In addition, it aims at improving the system impact on the environment. Financial technology also refers to the use of computer software to make financial activities more efficient and effective.
A recent study shows that consumers are turning towards new and innovative financial products and platforms. Most of these customers prefer to purchase online, as they do not have to visit any branch of the bank and can do transactions from any part of the world. Therefore, banking is fast becoming a client-less routine, where transactions are done through online. Hence, the traditional financial services are being replaced by innovative financial products and services like mobile banking, internet banking, online bill payment, electronic transfer of fund, etc. To tap these opportunities, finance firms need to adopt innovative and cutting edge fintech solutions.
According to an estimate, approximately $80 billion worth of capital is lost due to inefficiency, lack of efficiency and fraudulent activities in financial services sector annually. To maintain the profitability and profit levels, banks need to focus on core business processes, quality customer services and the overall process and infrastructure of their branches. In order to increase the profit and reduce operational costs, banks need to introduce various technological change to their service delivery. For instance, financial firms need to adopt online banking services for better, faster and smoother services. By doing so, they not only increase their client base but also increase productivity, reduce cost and ensure better quality of service. Many banks are adopting mobile banking as one of the best fintech strategies.
Today, many people are relying on their mobile phones to carry out banking transactions. Finance companies should explore mobile banking because this new technology can help them provide a variety of services to their consumers. Banks should take benefits of advanced analytics offered by fintech firms to identify their target customers. The data provided by these analytics can help the banks streamline their existing services and offer better and more customized financial products and services to their clients. By using mobile analytics, the banks can:
Apart from providing financial products and services, fintech firms can also help the banks improve their customer services, enhance the customer experience and increase customer loyalty. Today, many consumers have no access or knowledge about their financial health. They are mostly dependent on traditional banking that includes regular credit history checks. When these checks are conducted, it often results in unnecessary and inefficient service and even sometimes in fraud.
Fintech firms can help the banks by providing a platform for online trading and investing. Traders and investors can use the online platform to execute trades and purchase shares using real money without having to worry about incurring fees. Investing can be done through mutual funds, asset management programs and a host of other financial services. A number of consumers have already begun taking advantage of these innovative financial services offered by fintech companies. The future for banking lies in innovative technology, so it is always a good idea to try new things, even if they are initially complicated.