From humble beginnings a decade ago, Fintech started as mobile banking, serving the single purpose of facilitating basic banking transactions. Fintech, having evolved, currently refers to the global trend of private customers and businesses having the ability to automate their entire banking experience through AI-driven online utilities.
In finance, the ultimate value proposition has always been to be able to predict financial market trends. It should come as no surprise that providing customers with the ability to manage their portfolios with the help of a Fintech platform has become a very lucrative business model for many financial institutions. While some institutions build their platforms from the ground up, many are utilizing proven industry cloud platforms built to provide PFM for Banks & Financial Institutions. These pre-built, highly customizable Fintech platforms have all the foundational requirements such as security, functionality, and proven industry robustness.
Why is Fintech Evolving so Rapidly
It is both the customers and the institutions that implement fintech platforms that benefit from them. We have compiled a list of the top five benefits of Fintech platforms, to illustrate how Fintech and AI enable Client-Centric banking.
Convenient banking
The first main advantage is the convenience it brings to customers. A good example of this is where, traditionally, customers would have needed to visit a physical branch of the institution to perform complex banking tasks, they now can perform these tasks at any time of day without ever needing to set foot into the bank. This has a knock-on effect that the overall speed of, traditionally lengthy processes, has increased considerably. Reducing overall transaction time, improving convenience.
Improved trust through transparent banking
Fintech has, through its evolution, also improved the transparency of the financial industry. If we take global payment platforms, for example, the tracking and reporting of transferred funds, into and out of countries, have been dramatically improved. Fintech allows all parties to always remain informed of transaction statuses, across multiple time zones. Dedicated user support can either be partially, or entirely automated through AI too, improving trust in financial institutions that provide these platforms.
Adhering to regulatory compliance
Financial institutions have the ability, through Fintech, to define exact parameters of transactions to adhere to regulatory compliance standards in their industry. Paired with AI and trend modeling, financial institutions can now identify anomalous transactions in real-time. Being able to react by confirming these transactions with customers improves the overall security rating of the institution itself. Fintech platforms can, of course, perform this monitoring every hour of every day and not only during business hours.
Overall cost reduction.
Fintech platforms have facilitated the merging of physical and digital payment mechanisms that aggregate various bank accounts or cards through a single cloud-based interface. This feature provides customers with simplified transaction processes and lower overall expenses relating to investments and payments.
Cyber Defense
By utilizing a reputable Fintech platform, smaller financial institutions have the benefit of specialist cyber security professionals taking care of their online solutions. Linking up with the previous benefit, these platforms provide efficient cyber defense at a fraction of the cost of employing in-house security specialists. With improved cyber security comes improved trust in the institution. Bolstering its market reputation.
Unfortunately, innovation does not always come without its challenges. While Fintech platforms might have increased security, having instant, direct access to transfer funds presents its problem. With cybercrime on the rise and malicious actors devising new social engineering attacks on a daily basis, Fintech provides an increased risk to customers of being defrauded. This is unfortunately the human impediment to introducing Fintech solutions to customers.
In Conclusion
Fintech enables client-centric finance through stable platforms that utilize AI to provide customer services that appeal to the customer’s need for convenience, security, and cost saving. By providing customers with real-time business intelligence, they can remotely make informed investment decisions, decentralizing investment management from the institution itself.
As customers’ financial situations improve, improved monetary management also benefits the financial institution, since innovative solutions and services can be offered to them. Fintech platforms are here to stay and paired with the ever-evolving capabilities of AI will enable client-centric finance to improve much more in the future.
Also Read: Key Tips to Keep Your Finances in Check
