5 ways how emerging technologies are enabling FinTechs and Banks
By Leandra Monteiro
The pandemic has rushed technological adoption in almost every sector across the world. The financial sector too is working diligently to adapt to technology, digitization and use of data to come out of the current crisis and to build strength against any such future events.
“Mastercard has been tirelessly working with banks to enable them with services such as debit portfolio strategy, fraud optimization, risk assessment, product development, IT and MIS, customer service, legal and compliance, sales and distribution and many more. Mastercard has developed expertise and established best practices in cyber security and data management over years through its experience in securing information across its network, systems, and customer base. By defining risks in the context of true risk exposure, Mastercard is actively helping organizations close their security gap. For instance, Mastercard’s Cyber Quant measures an organization’s cyber security risks, flags security gaps, and estimates the impact of new cyber security controls on the business within an organization’s relevant threat landscape, creating personalized results and recommendations,” shared Sujay Vasudevan, Vice President, Cyber and Intelligence Solutions, South Asia, Mastercard.
Technological advances in the BFSI industry have led to fundamental changes in the way they operate. Technology has made banks work in tandem to harness the data for intelligent decisions. This has prompted many BFSI organizations to change their analytics landscapes and collect valuable insights from massive volumes of data assets stored in their legacy systems.
Here are 5 ways emerging technologies are transforming the finance industry:
Data helps to better serve customers: As for any organization, it is important for banks and financial institutions as well to establish strong relations with their customers and consumers. This would strengthen the trust quotient and ensure the longevity of the customer base. Employment of data analytics has been helpful for many organizations to establish trust with their customers. Algorithms, Artificial Intelligence (AI), and Machine Learning (ML) can process the vast amount of data that is generated every day and create actionable items. This data can be used to predict and anticipate customer behavior to elevate their experience. This allows banks to share potential products, upsells, cross-sells, and strategic planning to customers. The benefits of using AI in banks and fintechs also include optimizing back-end operations, data management, customer experience, compliance, product delivery and risk management. With AI-backed models, the ability to transform the banking experiences of customers is truly exponential.
Wearable Technology: Wearable payments are emerging as a secure method for consumers to purchase products or services by using advanced technology integrated into their smartwatches, smart rings, and wristbands. Wearable’s technology helps banks to seek customer insights through their interaction with other apps, services, and technology. Mastercard has introduced tokenization into a small and flexible chip that can be attached to wearables and accessories such as watchstraps or keyrings, turning them into contactless payments devices.
Open Banking: Open banking enables financial institutions to share financial data with one another and with Fintect partners. Once FinTechs partners get compliant access to this customer data, they can use their platform and technologies like Artificial intelligence and develop application that offer better and personalized engagement for the consumer to avail Financial products and services.
Alleviating fraud: Data analytics usage has helped to quell fraudulent banking activities by creating anticipatory alerts. While fraudulent activity is a common concern in the digital banking world, big data helps banks and fintechs build and equip themselves with reliable fraud detection systems by spotting any unusual transactions. Data analytics can ensure improved risk assessments which allow banks and fintechs to operate with more financial certainty, manage cash flow and offer customers competitive rates. Today, banks and payments companies are using biometrics and behavioral analysis software, to spot fraud. They also utilize anti-hacking tools which provide network-level security which looks for unusual behaviors and potential cyberattacks.
Chatbots, Bots, and Robotic Process Automation: AI-enhanced chatbots provide 24/7 interactivity. Smart virtual assistants can handle transactions, provide important information, and help customers in multiple ways. Robotic Process Automation (RPA) is improving the user experience by allowing bots to handle repetitive tasks without human intervention. Not only does it reduce errors, but it enables bank staff members to handle more complex queries and provide better customer service.