David Povey
Content Development Manager, ICA
The fintech industry is growing and is bringing with it new risks and challenges to the world of compliance.
We are approaching a major shift in how technology and financial services interact; cryptocurrency, blockchain, AI and fintech are about to change the face of financial services forever.
Cryptocurrency and blockchain
Cryptocurrency adoption levels are approaching 1% of the world’s population. This sort of mainstream adoption is bringing us to a tipping point as consumer demand for the use of cryptocurrencies increases.
Financial service providers have the opportunity to harness this new technology to improve internal systems and processes. Blockchain technology adopted in-house can increase security and efficiency, create more efficient markets and help to combat fraud.
Artificial intelligence (AI)
Within financial institutions there have been great advances in using AI technology to manage risk, automate numerous mundane processes and allow staff to focus on more complicated tasks better suited to the human mind.
Fintech is now providing new opportunities to engage with customers digitally and to improve the customer experience.
Some parts of the industry will adopt these technologies successfully, while others may shy away or fail to adopt them. Ultimately consumers will be king in determining the success of any developments.
Fintech competition
Customer service has never been more important for financial institutions. Fintech is now providing new opportunities to engage with customers digitally and to improve the customer experience.
A great example of this is how the onboarding and ‘Know Your Customer’ (KYC) process is changing – rather than taking five to seven days, we are seeing many banks carrying this out in a matter of minutes.
Internally there are opportunities for financial institutions to harness fintech; for example, to improve their systems to become quicker and more efficient, reporting and recordkeeping can be stronger with automated audit trails that meet regulatory requirements and better training can be offered, resulting in a higher skilled workforce.
How institutions adopt technology to better serve customers will dictate how successful they are in the future. New entrants, with lower operating costs and a head start on using technology, are seen by many as the future of banking. Also, by appealing to millennials and Generation Z, they are prepared to forge a path through existing institutions.
Fintech is the new frontier of banking and compliance.