Today the most important buzzword that has caused an uproar in the Banking and Financial services industries is Disruption. This vertical is probably the most impacted by recent technological innovations such as blockchain, robotics, big data, machine learning and prescriptive and predictive analytics. These technologies are majorly impacting the way we manage and transact in the financial world. Most payments can now be done online and there is a growing space for better payment methods including the emergence of payment processing platforms using e-wallets and mobile payment apps using digital wallets. All this digital innovation has caused massive disruption in the world of finance – one of the most legacy system based and heavily regulated the industry with strict compliance and auditing needs.
Let us take a look at some of the key new technologies that are causing the shift towards digital transformation.
If you have heard of bitcoins then in all probability you are familiar with blockchains. However, block chain has applications way beyond bitcoins and tech savvy companies are increasingly beginning to leverage this technology. The blockchain is basically a digital public ledger that maintains a distributed record of transactions across a network of public computers. Digital currencies have been using blockchain for a long time now.
At the heart of the blockchain is the concept of a network performing the role of trusted intermediary as against the traditional middlemen. This innovative financial technology has found several use cases in the industry and has also proved to be a major disruption for banks and traditional payment methods. Thus it is not a surprise that fin-tech companies are racing against each other to see how they can best leverage this technology to improve their services.
Digital wallets are another innovative financial technology that is gaining increasing popularity with smart phone users. These mobile payment systems are basically smartphones apps that can be used to hold your payments and loyalty card information. Major players in the market such as Google and Apple have their own digital wallets. There are also other providers such as Lemon and Square wallet that are also very popular with users. Google’s wallet is based on near field communication technology also referred to as NFC. The idea is that instead of using your card at the check out counter, you only have to tap your smartphone on the machine or wave it for the payment to be made. You can also save loyalty card information and coupons in most wallets as well as save receipts for future reference. Apple’s wallet uses the concept of a barcode for making payments. Needless to say, security is a very important consideration for digital wallets and all key players have the basic security measures in place.
Almost every area of the finance industry is being disrupted by these new technologies, forcing the traditional banking sector to re-evaluate and invest in digital innovation and transformation. This has changed the way of doing online business as we know it and the trend is only expected to continue in the future.