ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Financial Technology Is Now More Innovative Than Ever Before

Updated on February 1, 2018
FirozPatel profile image

Firoz Patel is an experienced professional highly skilled at creating and cultivating professional, mutually beneficial relationships.

Introduction

In recent years, probably financial services have undergone maximum transformations compared to all other industries. Earlier most financial service tasks were done via extensive paperwork and human interaction and then processed in bulk using computers. Getting a loan processed or availing insurance was a time-consuming task because of the number of checks and interfaces and also because the financial services industry is governed by heavy regulations.

However, with the increasing digitalization of work, there have been massive upheavals in the financial space. This industry has witnessed innovation and disruption like none other. Indeed it is not surprising that a maximum number of startups are focused on some form of financial technology or services. Now a majority of tasks are done through digital interfaces. Almost all kind of financial activity like banking, payments and wealth management are being transformed by start-ups. Not surprising then is the fact that financial services based startups have seen a good inflow of investments.

Automation

Startups are offering new ways of doing things and financial firms are coming up with new products of their own. The challenges faced by startups are different than those faced by established players. Banks and other financial institutions are investing more in innovation. Startups not only have an upper hand in innovation, they are trying to find ways to navigate the regulatory landscape and traditional business models. Automation is a key area of investment for financial services - it is estimated that more than 80% of financial services can be automated using Robotic Process Automation tools. This will not only cut costs but also result in faster processing speeds, greater accuracy, and reduction in human errors.

Blockchain Technology

Another area of interest has been blockchain technology. Traditional methods of payment are based on a centralized authority acting as an intermediary however blockchain offers a decentralized system for validating and verifying transactions based on a peer to peer network. Almost all major banks in the US and Europe are seriously looking at means to leverage this technology and it is expected to be a major disruptor in the finance sector.

Digital Currency

Financial institutions and startups around the world are exploring new technologies which store and record bitcoins transactions. This technology could help lower the cost of financial activities.


This could have a dramatic effect on big banks which have high operating costs. Overall, Bitcoins have seen a huge resurgence in recent times and there has also been an increase in their value. Many payment processing platforms, merchants and service providers today accept Bitcoins as a currency for payment transactions.

Image Courtesy: HubGA
Image Courtesy: HubGA

Challenges In Financial Technology

Fintech investments today are focused on how to get maximum benefit from being digital and how to avoid becoming outdated. Disruptive technologies in financial services have transformed the way in which money is managed and this affects every financial activity. Banks need to develop new platforms to help overcome infrastructure limitations. Startups, on the other hand, will have to find ways to scale out their business as per the regulations, cost, and infrastructure.

Cybersecurity is another item that is at the top of the agenda for financial service companies as they gear up to keep pace with the latest digital technologies such as blockchain, connected IoT devices, big data, advanced analytics and deep learning. Most banks today have legacy IT systems sitting on legacy infrastructure. As has been seen in recent times, the biggest risk with legacy systems is their security vulnerability. This makes cybersecurity a top priority for fintech companies.

If legacy firms have to keep pace with startups in innovation, then they will definitely have to look at fintech very seriously. Fintech companies and startups are expected to garner a lot of attention in coming years. There are many reasons why financial firms will set up their investments in fintech companies. The most common reason being fear of disruption. This threat is making companies invest in financial technology like never before.

Comments

    0 of 8192 characters used
    Post Comment

    No comments yet.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)