Emergent tech that are poised to drive the financial and banking domain in the very near future Part 7
This is the seventh and final part of the multi-part blog series on emergent tech within the financial and banking spaces, that are poised to take the industry forward. The final part of this blog series rounds up these emergent technologies that are having an impact on the financial/banking space, presenting a bird’s eye view perspective on these innovative technologies.
IoT (Internet-of-things) has a lot to confer upon the banking and financial space, and these advantages are not just surrounding customer’s physical assets. IoT deployments intend to revolutionize the finance and banking domain, just like they have every other industry.
The outlook for financial services and IoT tech
Financial services, for a long time, have trafficked that which is intangible, ranging from counterparty risk and internet bill payment to things that were prior tangible but are not considered so any more, like stock certs and even money.
With all the buzz with regards to IoT, an array of technologies and applications that furnish data about, well, things – might not appear directly relevant to the manner in which financial services enterprises / banking enterprises do business.
In the opinion of the Deloitte Centre for Financial Services research, there are immediate, and longer-term avenues for the financial services space to reap the benefits of Internet-of-things. However, the IoT might be as broadly revolutionary to the financial services space as the internet in itself, and leadership should make an attempt to identify the avenues and challenges it puts forth for the financial domain in addition to those industries which FSIs work in close proximity with.
Regardless of the unavoidable hype, several fields observe massive promise in IoT applications: Analysts and tech providers prediction added economic value of approximately from $300 million to $15 trillion by the end of the 2020s. Few analysts appear to expect nothing less than a revolutionary impact on just nearly every dimension of economic activity by 2020. The IoT – on the basis of the concept of physical objects having the capacity to harness the internet backbone to convey information with regards to their condition, position, or other traits.
Financial services leadership can easily visualize the prospective advantages from having a larger amount of rigorous, real-time data with regards to their own or their client’s physical assets. A few use cases have already made their case, applications like auto insurance telematics and “smart” commercial real estate building-management systems provide overt IoT instances of new products or altered processes.
Establishing the context
Several analysts perceive the IoT in a narrow manner, defining it as not more than an extension of related tech concepts, like machine-to-machine (M2M) communication or big data. However, the IoT, and its application’s prospective value goes far beyond mere data communication or analysis. IoT technology is defined as tech that interlinks objects in the physical world, to a network, (like the internet) in order to furnish access to data about that object’s condition, movement, or position.
Kevin Ashton, typically the originator of the term “Internet-of-things” in 1999, the turn of the millennium, visualized computers having “their proprietary means of collecting data, so they can observe, hear, and smell it for themselves.” Various IoT frameworks take this concept to the next level, through visualization of that data (for decision makers) or by furnishing it straight to computers to drive action in the physical world.
With regards to the financial services domain, how does the flow of IoT-produced data develop value for businesses and clients? Several firms are already harnessing sensor data to enhance operational performance, client experience, and product pricing. Probably the most mature instance consists of the development of utilization-based insurance, in which sensors in automobiles or, on an increasing basis, smartphone applications automatically furnish insurance carriers with data on a particular automobile’s driving history and thus their driver’s performance.
Leveraging telematics to improve the precision of underwriting vehicular collision policies, in addition to the utilization of gamification techniques on the basis of that data to alter and incentivize lower-risk driver behaviour, has been demonstrated to be very helpful in the preliminary phases of deployment.
AR use cases in the finance domain
On an increasing basis, when we go purchasing, we usually do it through our smartphones – this is the reality both offline and online, as several of us are abandoning the practice of hauling plastic in our wallets, preferring mobile payment services. This is merely another fashion in which society is transforming into an even more connected and ‘digital’ entity, and to a majority of us, our smartphones are the main interface between the cyber world and the actual world. Nowhere is this more the case than within the financial services space, with each banking enterprise and insurance organization eager for us to procure and setup their apps.
There are several reasons for this.
- Client experience
- Economic reasons – it’s usually less expensive for banks to furnish service than through brick-n-mortar visits
- The move towards always-on connections provides us access to a treasure trove of data on our life and habits that can be leveraged for several other purposes, from providing us customized products and services to minimizing fraud via biometric security measures.
- During the course of 2022, we will observe banks and insurers on an increasing basis, deploy chatbots, card-less banking (which includes ATM withdrawals), and customized communications, and they will come to us through our smartphones.
Banking in the cloud
Banks and financial enterprises were in the migration process to the cloud en masse when COVID struck, however the pandemic was a massive propellant of cloud proliferation. This was owing to the advantages it confers upon scalability at a time when digital services were witnessing increasing demand by clients, in addition to security and resilience. Cloud tech makes it more streamlined and less expensive to whip up projects on the basis of other revolutionary technologies specified in this list, like mobile, AI, and blockchain.
Enhancing client experience with tech
We are all aware that every trend specified above have been successfully deployed by financial services enterprises with the interest of automating and streamlining back-office functions such as transaction processing and fraud detection. Currently enterprises are at ease with these technologies, they will on an increasing basis feel confident in harnessing them to identify solutions to issues connected to their most critical asset – their clients.
These are the spheres that will witness explosive and revolutionary growth in the year 2022. Cloud services, AI, blockchain, and mobile are at their peak transformative potential when combined together to develop solutions that enhance the quality of life of clients. Banking applications are widespread and often intend to deliver a streamlined, and user-friendly merely by filling their main function of providing clients access to banking services from anyplace.
As a matter of fact, as the pandemic has unfurled its ugly feathers, apps have become the go-to for clients to engage with their banks. Currently the race is going between service providers seeking to distinguish themselves on how efficiently they can harness the most popular trends to further enhance the experience for everybody.
Several applications currently are bundled with built-in AI assistants that can execute tasks such as assisting clients handle their money more effectively through classification of expenditure patterns and automatically indicating where efficiencies could be made. Other robust sub-trends consist of personalization, where data is leveraged to match clients accurately with services and products that they actually require, instead of only the ones a financial services enterprise wishes to sell them.
An instance of this is when a lender has the capacity to pre-approve a client for a loan with no executing a search that influences their credit history. This implies they are able to go to that client with an offering of a loan, instead of merely an invitation to draft an application. Also, higher up on the listing of prerequisites is voice – that is, along the veins of chatbots, virtual assistants, and chatbots which are attaining a degree of sophistication where they become really beneficial.