The impact of financial technologies (fintech) on the Financial Services industry continues to be out-sized compared to others for reasons that are clear. The integration of cloud technology, mobile devices, and advanced web designs have made Financial Services better able to serve their customers, and the same technologies are making their internal processes more efficient. As artificial intelligence, distributed computing, and machine learning technologies are implemented in the financial sector, we expect to see even greater impacts in the next few years.
What are the innovations that are making financial services more efficient today? They can be grouped into three categories: Faster processing, greater inclusion of under-served customers, and reduced accounting error rates.
Leveraging the computing power and sophisticated software that’s available today, complex financial transactions can be processed quickly and accurately at a much lower cost than was possible in the past. This has saved financial service companies labor and made it possible for them to move forwards with complex new services with confidence.
The lowered costs of efficient processing have also made it possible for the financial industry to reach out to under-served consumers and include them. Sectors of the economy that were once dominated by cash are being penetrated by mobile apps and cash cards. This has, in turn, increased the overall size of the financial services market. As financial services become more trustworthy to these new customers, the industry will reap further rewards as they begin using traditional services.
Reduced Error Rates
Payroll services is a sector of the financial services industry that serves as a good example of how fintech has innovated a service that was once done by each business’s internal accounting department. Today most payroll transactions are handled by service contractors that leverage advanced processing technologies to eliminate the human error that was once commonplace. This has done more than save their customers the expense of handling payrolls themselves. It has also improved their employees’ job satisfaction by eliminating the time wasted by payroll errors. This automation has increased their quality of life as well as saved their employer’s money.
Fintech continues to provide ways for companies inside and outside of the financial industry to improve their productivity, and we expect to see similar trends in the future…