“We’re witnessing the creative destruction of financial services, rearranging itself around the consumer. Who does this in the most relevant, exciting way using data and digital, wins!” — Arvind Sankaran
The Buzzword “FinTech” is an innovative approach that adopts and fulfills the need of the rapidly changing technologies of the world. It is a digital wave that drives the success & stability in the pursuits of the brick-and-mortar financial sector. FinTech is a much deeper & subjective concept than just merely a simplistic term. Financial Technology is a need of the hour because of the potential to fuel up the marathons and decides the golden winners in the market in forthcoming years. It emerged after the “Subprime Mortgage Crisis of 2008” and begins a “Digital Revolution” in the unstable & sluggish finance sector.
FinTech is the digitization of data and digitalization of processes to create digital transformation in the business process. The future of FinTech entirely relies on evolving technologies. FinTech is one of the fastest-growing industries that comprise any corporation that automates and integrates the “ABCD” of technologies as a prime factor into its traditional financial services to make them apt to serve and process in the dynamic environment. Fintech AI & blockchain brings an enormous growth curve with every new morning. With the help of modern technologies, FinTech becomes the most resilient sector of dominance in the economy and achieving a distinct viewpoint.
The evolution of a novel span of FinTech usability has considerably influenced – how we perform a trade, transact, and transform the future of finance. Nowadays, users are shifting their consciousness more emphatically towards the financial sector to endeavor more dependable and genuine explications to their requirements. The adoption is very leading and penetrative that no circumstance who you are, where you are, what you are, and what you do – It all includes FinTech at some point. From using internet banking to application transfer, from digital bill payment to fund management broking sites, or even purchasing online, it all incorporates FinTech.
With the smooth rush in new FinTech organizations and startups, the only option for the traditional financial institutions is to embrace the improvised standards. These modern standards are significantly obscuring the limits among financial institutions and other business service providers, brokers, advisers, etc. Financial institutions are coming up with improvised technologies to stay sailing and contributing to the financial technology revolution.
Nowadays, numerous organization’s coins are anticipating in their pockets to get approval for contributing towards the financial technological revolution and startup ecosystem with innovative concepts. The ongoing phase of rising FinTech & RegTech depicts the broader sense that it would become the new foundation for the structure of tomorrow by employing the latest technologies at the base of finance to improve things.
Since the 2008 crisis, numerous big corporate houses began to contemplating & analyzing the concept of data management, and from there, data management is obtaining a robust niche in the financial sector. These efficiencies and effectiveness in the functioning of the banking and business financial systems make services ubiquitous, cost-effective, convenient, adaptable, and unified. Also, few years down the line, notable and significant innovations have been remarked in the payments system, tax filings, banking operations, investment decisions, and in other similar scenarios. The time has come where our smartphones are personal advisors and bankers, assisting & supporting us 24X7.
The future of FinTech seems like the entire elimination of paper notes currency and the utilization of digital currency or even, more than that, the decentralized form of money i.e. Cryptocurrencies such as “Bitcoin” and the record-keeping technology called “Blockchain”. It has revolutionized the idea physiques conceive concerning money and its worth shift in real-time, the digitized world is evolving into “Cashless” businesses, pushing them hesitant to embrace the practice of digital transactions, etc. The tour of progressing cashless begins by demanding customers to pay digitally for goods and services rather than using cash. Considering the future of FinTech, money transfers via smartphones or smart devices are one of the most critical progressions that several customers have embraced.
FinTech businesses are now heading the industry and, their integration with vast technologies has become the enabler for more reliable financial services, increased financial inclusion, and many customized products in line with the personnel financial goal, etc. fulfilling, the needs in the most effective manner. ABCD of Technologies called Artificial Intelligence, Blockchain, Cloud Computing, and Data Science are a few of the crucial technologies accelerating transformation in how an individual executing his/her day-to-day operations and how one is managing their finances. However, numerous traditional institutions have a misconception of perceiving FinTech as a disruptor of their industry rather than encompassing digitized innovation to transform the industry from top to bottom.
Nowadays, FinTech is empowering financial services providers to examine untapped Asian & Southern Hemisphere markets and acknowledging users to reach assistance earlier unavailable, via the convenience of a smartphone. It helps FinTechs to grasp and capitalize on underserved markets. These service providers are redefining and reforming the fashion in which corporations and customers are involving in business transactions. In the current scenario, global investments into exploring FinTech ventures are increasing at a high pace. Moreover, India is a high virgin marketplace for FinTech startups because still 40% of the people are not attached to financial institutions and, 87% of transactions are executing in cash. The future is perceived to have a 90% – 95% penetration of internet and mobile usage, which can link small corporates with financial institutions.
The application of Fintech AI & blockchain is changing the traditional formal grounds of finances by giving breakthroughs, innovations, and dynamic creativeness. These helps banks to assess credit scores of customers at their fingertips, utilization of blockchain algorithms & consensuses such as the history of calls or shopping to enhance customized performance, and implement more comprehensive admittance to credit. The processing time and cost are enormously faster for the endorsement and sanction of loans by FinTechs and, also, financial institutions are digitizing and speeding up these methods. Therefore, the future likelihoods in digital innovation inevitably offer a mutually exclusive relationship among FinTechs & Financial Institutions.
Artificial Intelligence & Blockchain is elaborating & stabilizing the future of FinTech organizations by matching up with the customer expectations and make them to revolving around opportunities. These are Meta-Technologies applied to increase profitability by implementing distinct approaches descended from the “Human Intelligence Code” that is beyond human scale. Moreover, these night-loving technologies have grown as a fundamental element of FinTech and, their diversified role is not just only to uncover a customized business solution for corporates but also to protect confidential data and the protection of FinTechs commercial assets, which is very crucial in the world full of a lot of hacking & cyber-attacks.
When we talk about Automation and Artificial Intelligence in finance, it becomes essential to be known of the fact that AI is more than just a technical solution and is different from automation. It is utilized for managing, examining, & discovering data, advancing enduring algorithms, and enhancing decision-making. The application of Artificial Intelligence in FinTech for the future can happen in numerous ways and, all are heading towards a better tomorrow such, as meeting more exceptional consumer penuries arising from the digitalization realm. These consumers are becoming less passive and more imperious. All they want is the technology upgrading at lightning speed at the particular moment.
Artificial Intelligence might be changing the prospective customers are thinking about the forthcoming financial industry. It is more focused at the customer level or, say a “Customer-Centric” approach. AI has a prospect in shaping the future of the finance industry according to the demand of the new generation because of its potential to mitigate and eradicate human errors in financial processing or transactions, helps to manage effective customer relationships, etc. It is thriving to modify the digitized waves in such a manner that fits users’ lives. We can comprehend that AI can be a substantial game-changer in encouraging efficiency and in inscribing obscure FinTech dilemmas.
Blockchain enactment dominates the future of FinTech as a distributed public financial ledger system. Blockchain technology has been recognized as a decentralized framework, which allows inherent global blocks of chain to store digital data and acts as a preventive measure in terms of confidentiality. However, FinTech firms are proceeding forward with blockchain development to be more than just a data storage service. Moreover, it is supporting the most eye-catching decentralized form of future currency called “Cryptocurrency”. As innovations are happening within and outside the finance industry, blockchain is evolving more from a security viewpoint to the speed of financial transactions. It also brings transparency to the actions executed by nodes in the blockchain.
Nowadays, the number of financial transactions are happening all around the world from numerous remote places that need someone to authenticate the transactions. So here, the blockchain operates as a third-party affirmation player that enables interested parties to write more customized smart contracts and letting all people to trace the documentation over a reliable interface. Blockchain is continuing to improve the future value system and enable the self-expression of humankind. It is a future approach of accounting as well as data organization. The future of FinTech with Blockchain is novel & sustainable. It will be going as the mainstream and can be executed on a large computation. It leads to the future evolvement of Cryptocurrencies. Nowadays, it helps in overseeing financial transactions on a real-time basis that assist financial institutions to access relevant financial information within seconds.
In the current scenario, Fintech AI & blockchain are the most ardent tech trends. However, the two tech trends have profoundly opposed development & the working domain, but the confluence of Artificial Intelligence and Blockchain would become a quite impressive and powerful combination. The amalgamation can uncover novel acumens into the finance domain. Embedding the two tech trends has the potential to manage data in techniques nevermore previously conceived achievable. The blend also has the potential to contribute as a “Twin Shield” against cyber-attacks. Data or Digitization is a common element among both tech trends that could make the integration possible and make it able to provide a virtual tamper-proof platform.
In isolation, both the tech trends are disruptive and rapidly developing with hands-in-hand in FinTechs. However, in amalgamation, Fintech AI & blockchain can be astonishingly innovative and articulated with anticipations. The union is still a considerably undiscovered domain. Nevertheless, the blend of two tech trends is rare, but the combination will create a tremendous variance if placed unitedly on the identical board. Therefore, the interplay amidst the two tech trends will be the future of FinTech and, its progress would be anyone’s opinion.
The only thing which is permanent in this world to survive is “Change”. Similarly, the FinTech improvisations are happening so fast so far and, it’s just the start to scratch the surface for identifying the future possibilities. However, it is no extravagance to assume that FinTech in hand with the assistance of AI & Blockchain is revolutionizing our endurance by creating things digitalized that don’t require any kind of substantial humanistic interplay. Moreover, it brings the new approach of RegTech i.e. technical notion in the realm of regulatory compliances and data protection. The ABCD of Technologies – Artificial Intelligence, Blockchain, Cloud Computing, Data Science, and numerous other techs are on the cutting edge and, business professionals are expected to solicit opportunities in their FinTech business model to find themselves in the “Win-Win” situation in the highly “Customer-Centric” world.
No ambiguity that – Fintech AI & blockchain is empowering financial organizations like nevermore since 2008. Nowadays, these are adopted to make the process more explicit and immediate. The world is going on with the “Digitized Data”, and to drill out insights, we need AI & Blockchain.
We all are aware of an old saying that – “Data is the New Oil”. Likewise, “AI & Blockchain are the Next Best Tech-Trend after Internet”
Blackcoffer Insights 24: Adarsh Agrawal, School of Business - University of Petroleum and Energy Studies, Dehradun
