Key Factors For Digital Transformation In FinTech
IoT is transforming financial services business around the world. In a brief span, the finance and banking sector has become reliant on the technology that strengthens their data processing, security authentication and smart customer support. The banking sector is evolving in a competitive environment due to the modest economic outlooks, evolving customer behavior, regulatory changes and the rise of FinTech.
COVID-19 has built up the urgency to facilitate remote working methods and shifted the entire focus to online and digital promotion. So, banks operating in traditional methods were under pressure and had to adopt evolved practices to provide better customer service. As many digital transformation companies were facing a lack of sufficient scale, capabilities, and budgets to adapt to the new situation immediately, some were struggling to stay afloat. Banks had to spend valuable time and resources on cost reductions while at the same time transforming the operating model by enhancing and improving customer experience.
Unlike large banks, small ones couldn’t afford dedicated funds to help drive FinTech innovation. Technological development has made changes in banking infrastructure by making it more accessible so that it will lower the hurdles for smaller players to compete.
FinTechs use AI and IoT to enhance their services and provide more reliable customer support services.
- Enhanced business efficiency
AI and IoT applications help firms with automation services that increase productivity and efficiency. IoT in FinTech is an economical solution available in the market that will assist in customer service and streamlining various features.
For example, many banks use signs that help customers use their mobile phones to open doors at ATMs during non-working hours rather than utilizing access cards.
- Security Assurance
Security is a crucial concern when connecting multiple devices into a single network for sensitive matters like finance. A study by PwC stated that 49 percent of surveyed companies encountered fraud activities in various ways. Implementing AI and IoT systems would prevent financial fraud, which is crucial to reduce the losses banks go through. Soon, banks will have cloud-based services as a crucial business model.
- Risk Mitigation
FinTech includes trading and requires tracking of the high-value goods delivery. IoT can accelerate this tracking for detailed monitoring, such as the temperature of pharmaceutical shipments. IoT devices send alerts about the chance of spoilage during the shipment process. IoT devices help to avoid risk by detailed monitoring and providing information regarding risk mitigation.
- Wealth Management
Banks use the information provided by the customer to convert it into data processing algorithms to manage wealth and enhance services. IoT helps make the data accurate and speed up the entire process to utilize available insights. IoT-enabled wealth management solutions provide security with an intelligent alert feature that can notify in case of fraud or risk.
IoT in the FinTech and banking sector is utilizing the services to give the best to clients.