Implementing Advanced Financial Services Technology: Future Trends in the Financial Services Sector

Future Technology Trends in the Financial Services Industry: Implementing Advanced Financial Services Technology

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In an era characterised by rapid digitalisation and an increasingly online economic landscape, the financial services industry is enduring a significant technological-driven transformation. This comprehensive guide examines key emerging trends in financial services technology, and is tailored to meet the insight and strategy requirements of financial service firm directors and operations managers.

The transformative force of technology in the financial services industry cannot be denied. The global financial technology (fintech) market is projected to reach a staggering $699.50 billion by 2030, a reflection of the rapid innovation and changes within the financial sector. Fintech not only improves the efficacy and precision of financial operations, but also facilitates a transition towards a customer-centric service model.

This article will examine the transformative technological trends that are propelling change in the financial services industry, such as:

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Utilising the Potential of Automation in Accounting

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In an ever-changing regulatory environment, technology is the key to future-proofing financial services companies. With the advent of Artificial Intelligence (AI) and machine learning, advanced automation technology can provide current, vital insights, allowing financial advisors to confidently serve their clients.

Recent data from Prophix's 2023 Finance Leaders Survey of 700 finance executives in North America and Europe revealed that over six in ten (65%) finance leaders intend to automate half of their responsibilities by the end of 2023.

Automation, especially in the realm of cloud-based accounting technology, lends unprecedented efficiency and precision to daily accounting tasks. By automating repetitive duties, businesses can reallocate their resources towards value-added, growth-driving strategic operations. Eliminating manual data entry and paper-based forms increases scalability and enhances customer service.

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The Artificial Intelligence Revolution in Financial Services

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Artificial Intelligence's (AI) transformative impact on the financial services industry cannot be exaggerated. According to a survey of 500 worldwide financial services experts, 36% reduced annual expenditures by more than 10% by adopting A.I. applications. And nearly half (46%) believed it improved the consumer experience.

Consider how AI is altering the financial landscape:

AI for Fraud Detection: AI-powered tools analyse millions of transactions in real-time to identify suspicious activities and prevent cyberattacks. This technology is indispensable for preserving the integrity of financial institutions and safeguarding customers.

Chatbot Solutions: AI chatbots, enabled by Natural Language Processing (NLP) and Machine Learning (ML), provide round-the-clock, responsive customer support, relieving the burden on customer service teams.

AI-driven Robo-advisors: Robo-advisors offer a suite of services including portfolio advice, tax optimisation strategies, and automated portfolio rebalancing. These services are informed by algorithms and data analytics.

[ChatGPT]: Powered by NLP and ML, ChatGPT provides clients with personalised insights and recommendations to improve their financial management.

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The Growth of Blockchain Technology in Financial Services

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With its decentralised and encrypted ledger systems, blockchain technology provides robust solutions for data storage, payment processing, and asset monitoring, among other applications. Blockchain technology can balance the playing field for small and mid-sized financial institutions by providing secure and efficient transaction processing, thereby reducing the need for substantial investments in IT infrastructure.

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Open Banking: A New Era of Sharing Financial Information

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Open banking, enabled by Application Programming Interfaces (APIs), enables banks and non-banking financial institutions to securely share consumer information with third-party service providers. Open banking promotes increased consumer engagement and streamlined transaction procedures by allowing customers to access their data across multiple banks.

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Cloud Computing's Potential in Financial Services

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Cloud computing provides secure data storage and dependable processing power to industries that manage vast quantities of data. With flexible resource allocation, lower operational costs, and access to AI-enabled technologies, cloud computing improves data management and security while decreasing the need for expensive hardware.

According to the most recent findings of Flexera's "2023 State of the Cloud Report,"?one-third (33%) of financial-services organisations anticipate to employ a combination of on-premise and cloud/software-as-a-service (SaaS) for corporate financial data. For consumer data, such as protected health information (PHI) or personally identifiable information (PII), an even higher proportion (35 percent) anticipates adopting a combination of on-premise and cloud/SaaS. Today, more than 44 percent of financial-services organisations' data is on the cloud, with that figure expected to climb to more than half (52 percent) in the coming year. It is apparent that financial services are recognising the cloud's promise.

The use of cloud computing in the financial services sector is proving vital. Cloud-based solutions not only provide safe data storage and powerful computing capacity, but they also offer significant operating cost reductions. The availability of AI-enabled tools highlights the technology's potential for revolutionising data management and improving security standards.

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Future Prospects: A Cyber-First Digital Workplace Modernisation

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To attract the next generation of talent, accounting firms are employing cutting-edge technologies and innovative management practises as we move towards a digital future. Technology-driven companies are reorienting themselves to provide strategic

Advisory services, data analysis, and innovative tax strategies reimagine the accounting industry as a dynamic and innovative sector.

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In the future years, the ongoing digital transformation of the financial services industry is anticipated to accelerate further. To remain competitive, it is essential for directors and operations managers to implement advanced financial services technology solutions. Embrace the opportunities that these emerging trends present, while simultaneously implementing robust cybersecurity measures. IT managed services firms can assist financial services firms navigating the new digital landscape to identify efficiencies, security and client satisfaction benefits throughout the organsiation, learn more here in our previous blog post. Plex IT aspires to be your trusted partner on this digital voyage, providing robust protection against digital threats so that you can remain focused on achieving your business objectives. Contact us here at this link.

Article By: David Payne

Original Article Link: Financial Services Technology: Future Industry Technology Trends (plexit.com.au)