FinTech — or financial technology — has become a big player in the world of banking and finance. What started as the technology used in back-end systems of banking and financial institutions has morphed into consumer-oriented services. FinTech startups are creating innovative products and services of their own that are attempting to edge out their parent sector. New, better, faster, cheaper, more efficient ways to make mobile payments, bank online, manage your finances and more? FinTech has your back. Keep reading to learn more about just a few of the sweeping changes that FinTech has brought to the world of banking and finance.
The use of AI
Artificial intelligence is becoming an inevitable part of nearly any sector. In the future, no job will be safe from AI because of how far-reaching this technology has become. That said, FinTech startups have become integral in expanding the uses of AI. A couple of examples:
1. Fraud detection:
You suddenly receive a text message that your credit card was charged in another state. Your credit card asks you to confirm whether or not it was you. You text back declining the charge, and it automatically blocks it as a fraud. Was there a person at the other end of that message? Nope! That was AI at its finest. While the fraudulent claim will later be investigated by a human customer service agent, the software that banks use automatically generated that alert. It watched your patterns and knew that (based on location) it was a potentially fraudulent transaction. Because fraudulent attacks are becoming more sophisticated and can be difficult to detect, utilizing AI technology is one of the best ways that banks can protect themselves and their customers.
You can thank FinTech providers for the nice and friendly “chatbot” that pops up when you click onto a website. Chatbots are machine learning software with natural language processing. They are constantly learning from human interaction, which makes them highly efficient for routine customer interactions. They are able to handle easy customer inquiries and direct customers to the required departments or a human customer representative if they are unable to help. According to Deltec Bank, Bahamas-“Chatbots are helping to reduce costs, increase efficiency, and enhance customer satisfaction.” If you can type your question and get an answer in two minutes rather than sitting on hold for 10, which would you prefer?
Ask anyone under the age of 30 the last time they were in a bank branch recently. Unlike their parents and grandparents before them, there is just no need to go to the bank frequently. Aside from the occasional stop at the ATM, millennials are big proponents of online banking because of their efficiency and convenience. FinTech is responsible for many of these mobile banking advancements and services, which has forced many of the big banks to move towards a user-friendly mobile interface and a mobile app. From paying bills to depositing a check to viewing your statements and balances, everything is now in the palm of your hand. No more waiting in line for a teller!
Along this same line of thought, E-Wallets like Apple Pay, PayPal, Android Pay, and even the Starbucks wallet app on your phone are now being recognized as a significant technological advancement in banking that the FinTech world has spurred. These methods facilitate P2P payments and also often offer points or other rewards that are enticing to consumers. As such, banks are being forced to acknowledge just how big of a player they are becoming.
According to Deltec Bank, “AI and mobile banking are just two of the many impacts of FinTech.” Yet, you are likely able to relate to almost all of the above. You see it in your daily life and may utilize these options yourself for convenient, efficiency, and cost-effectiveness. This alone illustrates the impact of FinTech and the changes coming to the banking and financial sector.
Disclaimer: The author of this text, Robin Trehan, has an Undergraduate degree in economics, Masters in international business and finance and MBA in electronic business. Trehan is Senior VP at Deltec International www.deltecbank.com. The views, thoughts, and opinions expressed in this text are solely the views of the author, and not necessarily reflecting the views of Deltec International Group, its subsidiaries and/or employees.
About Deltec Bank
Headquartered in The Bahamas, Deltec is an independent financial services group that delivers bespoke solutions to meet clients’ unique needs. The Deltec group of companies includes Deltec Bank & Trust Limited, Deltec Fund Services Limited, and Deltec Investment Advisers Limited, Deltec Securities Ltd. and Long Cay Captive Management.