Emerging Technologies In BFSI (Banking, Financial Services, and Insurance)
BFSI is a vital part of any country’s economy. For the year 2023, the global BFSI market was worth a monumental $20.5 trillion. This figure testifies to the enormous importance as well as influence of this sector. We take a look at emerging technologies in BFSI.
Financial institutions store and process a huge amount of data. To meet this need, conventional technology uses a lot of resources and time. Quantum computing is a state-of-the-art technology that offers the best possible performance. As a result, more and more financial organizations are using Quantum Computing in their everyday operations. One of the features of quantum computing is almost unbreakable quantum cryptography. The latter ensures robust security which is demanded and expected by contemporary customers as well as clients of financial institutions.
In this type of banking there are no physical branches. Hence there is very less capital as well as operating expenditure. Neobanking is digital banking that offers convenience to the bank as well as its customers. Also, Neobanks charge lesser fees as compared to conventional banks.
In this financial model, banks share customer data with other financial entities. Application Programming Interfaces (APIs) are used to let websites or apps obtain customer data from the database of the banks. Smaller entities get access to customer information of other financial institutions giving them the opportunity to offer their respective products and services to individuals who would otherwise be unknown to them. In this model, care is taken that customer data is not compromised. This step is vital as well as important to retain customer trust.
As most banking and financial services are available online there is a rising risk of data theft and loss of money. This harms the financial institution’s revenue as well as reputation. The frequency and sophistication of cyberattacks on financial institutions is rising day by day. Older identification and authentication methods such as passwords and PIN(Personal Identification Number) are no longer sufficient. Hence, Multifactor Biometric identification and authentication are increasingly being used by financial institutions to ensure that only the right person can use the online financial service. This includes fingerprint scanning, eye scan and voice recognition among others.?
Training Solutions using Virtual Reality are used to train staff to handle different scenarios such as customer grievance, customer support, accessing financial data and others. This helps staff to offer better user experience to the customers of the concerned financial institution. For individuals living in remote areas where there is no physical branch of the financial institution, they can access banking/financial services through virtual reality software that simulates the working environment of the financial institution.?
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The emergence of Generative AI is a major development that extends to the financial sector too. The fields of Wealth Management and Investment Planning use Generative AI to obtain superior and personalized financial advice in real-time and dispense them to clients. This is a significant improvement in terms of personalization and speed of delivery when compared to earlier methods.
RegTech refers to regulatory technology. The financial sector is a highly regulated industry with new rules and regulations being introduced at a fast pace. As such the lawyers of the respective financial institutions struggle to keep abreast of the latest financial rules and regulations. Non-compliance may result in hefty fines and in severe cases there may be suspension of services. Artificial Intelligence and Data Analytics are used to make sure financial institutions comply with all the regulations as well as bring down the expenditure of complying with the existing regulations. As technology is leveraged instead of human resources there are lesser errors, faster speed of implementation and significant reduction of financial costs. Using technology for regulatory compliance in the finance domain is no longer a luxury. Rather it is a necessity for survival and obtaining a competitive edge in the market crowded with many players.?
Non-financial entities are able to offer facilities for obtaining loans, insurance policies, multiple payment options, and other financial services. For example, customers buy products from Amazon's websites by availing credit facility through a few clicks. The traditional process of obtaining loans involved filling out a paper form, going through evaluation and waiting for final approval.
This is one of the leading and cutting-edge technologies of the financial sector. Leading industry experts predict that Blockchain is the future of finance. For your information, Blockchain is a technology offering decentralization where transactions are immutable as well as unalterable. It is useful for making secure payments, minimizing frauds as well as executing smart contracts. Another advantage that Blockchain solutions provide is a high degree of transparency.
Many people are aware of the IoT (Internet of Things) where there is communication between interconnected devices. In the Banking of Things model, wireless technology is merged with credit as well as debit cards to do contactless transactions. The future is the use of NFC (Near Field Communication) and QR (Quick Response) codes. The latter is very popular in China as an efficient, effective and convenient payment method.
Why CoffeeBeans?
The team at CoffeeBeans has been working in the BFSI domain for years now. Hence, they have relevant and vast experience and expertise in this major sector. For your information, CoffeeBeans has a pool of accomplished software designers and programmers in a wide range of technologies as well as frameworks. As we are based in India, we offer world class services at economical rates. We follow mature processes and prioritize transparency as well as real-time communication. As such we are well positioned to meet the unique and specific needs and preferences of potential customers. Our past clients can vouch for our stellar services as well as quality of deliverables. Reach out to us to help understand how we may fulfill your goals and objectives.