Technology has changed the way the world works completely. All our industries have evolved with the advancement in the field of technology. Our factories and now even houses have several machines that are an outcome of technological revolution. Our hospitals are now more efficient than ever; several equipment have been designed to treat medical emergencies. It is just right to say that technology has brought forth a change of unimaginable magnitude. Our business industry has also been shaken by its core. The big elephants of the financial world such as banks and insurance companies now are face to face with many innovations. Investors are easily connected to those in need of funds easily with the help of technology. The list is not exhaustive yet there are many more changes that have taken place, let’s talk about them in detail.
Fintech is a great help for many
Fintech is a sort of financial technology. It aims to provide people with the services similar to that of what banks and insurance companies do. This is a more convenient option as it is based on internet connectivity and modern technology. Previously, it was mostly just the rich who could take part in the financial services industry. Now even small businesses can partake in this exchange. Fintech is becoming a popular option for many as it gives more control to the customers over their choice of financing mode and terms. You can easily get a loan, buy an insurance policy or invest in a bank through these institutions. These companies have caused loss of business to the traditional financial service providers.
Peer to peer lending models
Banks are a bridge among people. People who want to save money with the banks and the people who need money in the form of loans from the bank can connect by means of banks. Now things have transformed, the banks have been excluded from the equation and both the parties can connect directly with the help of peer to peer lending models. These models are more convenient to both the parties as they are cost and time efficient.
Online businesses can easily track the activity of their customers. They can study customer behavior closely and can use the information gathered to mold their services according to customer needs. They can tailor their services according to customers’ needs specifications and focus on customer satisfaction. In the previously popular financial services, main focus was on the product rather than the customer.
The financial service industry has become globalized. Previously only a few big cities like New York were the center of financial services. Now many other cities like Dubai have become a major contributor to the financial services market. Because of technology parties to exchange transactions can conduct business from anywhere and carry out several transactions.
Cut down on man power
This increase in technology has replaced humans with more efficient and cost friendly machines in all industries. In the past humans were employed to do the smallest tasks such as screwing on a cap on a tooth paste tube. Now because of modern technology, a machine can do the same task quicker and better without any limitations. Similarly, in the previous times, banks and insurance companies were run with the help of several employees now the system has become automated and digital software have replaced people that has help make functions error free and time efficient. There are many new job opportunities for people associated with the new automated financial world which, as a requirement of time, need to be tech-savvy just like anything else.
Competition is rising
Insurance companies and banks have improved their services greatly. They are trying to compete with small companies based online that are doing more business than these traditional businesses used to do. To avoid business loss greatly these businesses are evolving their services and becoming more customer friendly. This has helped customers a lot and ignited a healthy competition in services sector.
The processes of transactions and other operations have become quicker and more hassle free. Transfer money from your account to another is now just one click away. You can put in your credit card number and shop hassle free rather than carrying cards and physically moving to the shopping places.
Security of data and finances has always been a big concern for all financial service providers. In the previous times securing data and finances was a lot easier than it is now. Previously the person in the service room was supposed to worry about security, now achieving a secure environment takes up a lot of effort and money. Earlier there were only two parties concerned, the service provider and the customer and the exchange took place behind closed doors. Now because of internet and modern technology more and more people are getting involved and exchanges happen online using many different servers. These servers are vulnerable to hackers and can easily be infiltrated. Data can easily be stolen and sold which makes online business an insecure experience. This is the biggest drawback of using technology in the financial world.
In conclusion, these changes have restructured everything which once was a component of financial business model. Traditional institutions are now levelling up to the fintech companies on hope to get better business. Even though things have become easier, it has with it a lot of setbacks. But the advancement does not stop here. There is still hope for the weak links to improve overtime and the traditional institutions adapting to the evolving technology every moment. Let’s see what the future is going to be like for the financial sector.