The industry reporters say, the banking and financial services industry is turning its focus toward innovation to prepare for a future that will be increasingly driven by technology.
Key trends driving these innovations include:
- Ongoing digital transformation
- The increasing role of artificial intelligence and robotics
- Collaboration with FinTech
Banks and financial institutions are looking to re-define themselves as agile technology companies to prepare themselves for demographics and lifestyle changes along with the increasing demands and ever-changing preferences of customers.
AI and robotics
While customer needs and competitive forces demand that banks adopt whole digitization systems and processes, performance pressures by other competitors lenders require banks and financial institutes to reduce costs and keep operating margins healthy.
As new regulatory requirements and data protection laws put additional strain on already stretched resources, emerging technologies such as AI and robotics are helping banks more efficiently address these constraints.
In fact, many pioneering companies in the BFS sector are already experimenting with multiple use cases of AI in their operations.
From using AI to power chatbots which provide round-the-clock, agile customer services, through utilizing the technology for important functions such as anti-fraud and regulatory compliance. Deltec Bank said, “By harnessing the power of AI, banks and other financial institutes are realizing the benefits of optimizing costs while improving operations.”
Additionally, technologies such as Robotic Process Automation and machine-learning are helping banks replace labor-intensive, manual workflows with highly reliable, cost-efficient, and fast robotic operations.
“By harnessing the power of AI, banks and other financial institutes are realizing the benefits of optimizing costs while improving operations”.
The emergence of FinTech companies
Many banks are seeking to exploit the opportunities presented by digital systems, either by more efficiently utilizing their current in-house technologies or by partnering with disruptive new and innovative FinTech companies.
Initially, these companies were seen as competitors taking advantage of the void that was created by the BFS industry’s inability to keep up with technological breakthroughs.
However, today, bank-FinTech partnerships are increasingly the norm. They are able to provide
- Loan Servicing
- Other tech-enabled banking products.
And more industry experts tell us, banks are also discovering some other advantages of bank-FinTech partnerships, including access to assets and customers, so these fledgling partnerships, are beginning to re-shape the financial services landscape.
The traditional concept of money
Technologies such as blockchain are already ushering in a new revolution by questioning the conventional economic value offered by the traditional BFS industry.
According to Deltec Bank “Blockchain is shaking up the very foundations of traditional business models with peer-to-peer lending, smart contracts, and digital payments, eliminating the requirement for extra layers and speeding up the whole process.”
Blockchain is expected to save as much as $206 billion in annual operating costs for the BFS industry,
prompting an increasing number of banks to look at the benefits and begin trialing the technology in their commercial ventures.
“Blockchain is shaking up the very foundations of traditional business models with peer-to-peer lending, smart contracts, and digital payments.”
To finish up…
It’s not only Blockchain embedding itself in the FinTech marketplace. in addition to blockchain, cryptocurrencies such as Bitcoin, Ethereum and Ripple are slowly gaining traction, questioning the need for physical cash itself.
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.