The 21st century has been characterized by enormous technological advancements, which originated with the advent of the computer and have steamrolled directly into our modern-day economy. Virtually all industries are integrated within the digital world to some degree. This integration is precisely why the demand for data analytics has continued skyrocketing. While data analytics were primarily useful for quant jocks in more complicated Wall Street maneuvers of the 20th century, they have now thoroughly suffused enterprise activities across virtually all industries, reaching the consumer level.
While much attention has focused on how social media has revolutionized communications and marketing, as well as various political processes, yet the public tends to have less familiarity with FinTech. FinTech is a burgeoning field that has exploded in Asia and is growing increasingly prominent in Europe, Australia, and the United States. Offering consumers many benefits, including simplified payments, FinTech also represents a boon for data analytics on the producer end. For traditional enterprises, enlisting the services of a FinTech software development company is often necessary to maintain existing operations while innovating sufficiently for the future. These companies offer an array of FinTech services, including digital banking, digital payments, and AI analytics.
Digital Banking
Many professionals are now aware of the importance of digital marketing, and they will likely grow increasingly aware of the digital banking phenomenon as FinTech continues to disrupt financial industry strongholds. Digital banking offers customized banking services for end-users, obviating the need for them to physically enter a branch of their local bank. One of the greatest advantages of digital banking is that appeals it offers is the general absence of extensive paperwork, such as manually filling out a deposit slip for a check. Now, courtesy of various mobile apps, such as the Bank of America app, consumers can deposit checks from the convenience of their home, without the time-consuming experience of driving to a bank. Furthermore, given the closures of many facilities after the pandemic emerged, digital banking will become even more important as time passes.
Digital Payments
Digital payments share some similarities with digital banking, though they also differ due to their inclusion of revolutionary financial organizations, including the digital payment forerunner, PayPal (News - Alert), and the resulting digital payment efforts that emerged afterward in response to the widespread transition from desktop to mobile at the consumer level. For this reason, PayPal created Venmo, a mobile application that provides end-users with the ability to instantly pay, or “Venmo” someone else; another startup, Square, also permits relative ease of transferring funds to other users through its cash app.
The absence of cash further undermines the traditional services offered by a standard bank, which is why many banks have initiated their own digital payments services, such as through Zelle, which are designed to stymie the increased threat from applications such as Venmo and Square’s cash app. The combined effects of enormous e-commerce growth, which has become downright exponential during the pandemic, signals virtually unlimited demand for a variety of digital payment services in the future.
AI Analytics
Ultimately, FinTech companies are at the cutting edge of big data analytics and artificial intelligence (AI) advancements, in conjunction with helpful applications of machine learning (ML). The finance industry in particular is strongly affected by these advancements, given the traditional use of big data analytics before these analytics spread into other industries, such as retail. Unsurprisingly, the finance industry remains one of the most voracious consumers of big data now, which necessitates the need to remain consistently abreast of all the latest advancements in AI and ML, specifically the ones with use value, rather than theoretical.
These terms are just beginning to graze consumers’ consciousness, although on the producers’ end, both AI and ML have been incorporated into business strategy with varying degrees of success, depending on various factors, including the selection of the best consultant for more complicated business applications. AI and ML can assist financial companies with making quicker, more effective decisions, particularly in hedge fund management, thereby enhancing client conversions and remaining as competitive as possible. In short, failure to adopt AI and ML will eventually lead to an inability to remain competitive in an already extensively challenging industry.
Final Thoughts
Overall, advances in FinTech are exciting and represent an enormous degree of opportunities, as well as threats, to the finance industry. Existentially, some view the eventual closure of traditional banks given the rampant growth of digital banking and digital payments, which are closely related to AI and ML. On the other hand, a major threat to digital banking, in general, is the protection not only of consumer privacy but also of consumer finances, particularly since some of the aforementioned services have already experienced security breaches. Thus, whenever employing the services of a FinTech company, possible opportunities and threats should be equally taken into account, as successfully preparing against a threat represents another opportunity for FinTech service companies.
