The rapid proliferation of fintech across today’s B2C marketplaces have significantly challenged legacy banking services – and still continue to do so. The worldwide inclination towards alternative money transfer applications such as PayPal, to online forex/stock trading platforms suggest sufficient proof that customers are open to options that are easier, convenient and less fraught with red tape.
With fintech exploding in popularity across markets globally, traditional banks are also looking to shift their status quo, by embracing fintech technologies as well; further evidence to suggest just how impactful fintech has been. As banks and other legacy financial institutions realise the potential of certain advantages that fintech solutions can offer (such as self-service), making the case for embracing fintech becomes easier to justify, and act upon.
On the other hand, banks still have a pressing need to digitalise otherwise conventional services, such as fund transfers, account openings and balance inquiries via online banking. As more and more consumers use online banking services to manage their funds, banks need to maintain these services with maximum uptime – and stay compliant as they do so.
As a software outsourcing company based in Sri Lanka, EFutures has worked with leading Sri Lankan banks and financial institutions such as Seylan Bank, People’s Bank, CeyBank and even the Colombo Stock Exchange (CSE). In this article, we share insights through our hands-on experience with regards to trends dominating the financial services industry, as well as some of the ways that businesses can get onboard with developing the right set of financial tools – no matter which industry they operate in, and the nature of services they offer.
Although online banking isn’t a new financial trend per se, it is one that is most dominant in the consumer financial services industry – as well as one that drives much demand towards software development outsourcing companies. Additionally, it’s a trend that is definitely here to stay, owing to an ever increasing demand for customers to attend to their banking needs without having to walk into a physical location. With remote environments now having become the norm, more and more customers are expecting self-service tools from their banks, so they can conduct banking operations no matter where they are located, and at any time they prefer.
Conversely, banks also benefit from offering self-service tools, as they can reduce customer inquiry volumes. In turn, this also improves customer satisfaction rates, as customers do not need to wait for someone to connect with over the phone (especially if it involves having to wait for long periods of time – which is disastrous for customer satisfaction scores). At the same time, customer support agents now have more time to allocate attention to inquiries of a more complex nature, including those that require direct intervention by a human agent.
While online banking counts as a self-service tool in itself, other self-service variants also exist in the consumer financial services industry. Phone and chat-based banking is one, whereupon users can dial a number or initiate contact with a chatbot, to avail general information. Phone-based banking can also facilitate balance inquiries, such as those for credit cards.
On the other hand, Cash Deposit Machines (CDMs) are also another self-service option. Physically situated within a bank’s premises, some CDMs can also be located off-site, to offer customers the convenience of depositing and withdrawing funds – without having to walk into a physical location, fill any slips, and stand in a queue.
AI and machine learning have spearheaded the implementation and subsequent widespread adoption of intelligent forecasting, automation and cybersecurity – all of which have a broad range of applications in the banking and finance industry.
Transforming, modelling and gaining insights from big data has been one of AI and ML’s biggest use cases, which thereby help decision-making teams determine customer preferences, as well as ascertain business areas that can be automated – to improve CX and employee productivity at the same time.
Enabling robust cybersecurity is another major use case for AI and ML. Intelligent facial recognition systems can help financial authwalls determine whether authorised users are attempting to gain access to an account – including expressions of distress, to indicate whether they may be possible victims of a scam or fraud, while transferring funds. AI-powered anomaly detection can also be applied across MFA workflows, to further prevent unauthorised access, and identify possible perpetrators.
Thanks to its ability to derive intelligent insights via self-learning and subsequently extrapolating from previous items of data, AI can also be used for predicting market movements. By processing vast amounts of historical data (including news articles and sentiments across social media), AI and ML can enable investors and traders to derive insights prior to buying or selling assets.
RegTech (short for ‘Regulatory Technology’), is an emerging technology that focuses on offering relevant tools and processes to help companies stay on top of their compliance obligations. Regtech companies make this possible by enabling vendors to track all compliance regulations within one unified system, and adhere to them in a timely manner, so any risks are averted, as well as penalties. However, it is important to note that the regtech industry is still very much an emerging one, so it is advisable to perform extensive research in order to determine the right provider for your business, if you intend to partner with one.
Thanks to its decentralised and tokenized system of conducting transactions, blockchain is gradually being adopted by fintech companies in order to deliver greater protection for their clientele, when it comes to financial transactions. Additionally, leading software outsourcing companies have also evolved to offer blockchain-based services to clientele that require secure means of transferring funds, to ensure the same calibre of heightened protection across the digital landscape.
Fintech and banking software are significant contributors to the financial services sector at large, owing to a rapid uptick in demand from both customers that are looking to help themselves without relying on clerks behind a counter – as well as from banks themselves that are looking to minimise customer volumes over the phone and across physical locations.
Irrespective of the nature of services your financial business specialises in, determining the right set of financial software capabilities can be done in three steps:
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