Authored by Kalyan Kumar, Corporate Vice President and CTO, IT Services, HCL
As financial institutions increasingly embrace digital technologies and start to become tech solution companies, what role will new technologies like blockchain and AI play in fuelling this change?
An Industry in Transition: Reckoning with the Headwinds
Today, the financial industry is in a state of constant change as it continues to evolve through demanding client needs and regulatory/compliance requirements. Beyond regulatory scrutiny and competitive stress from internal and external stakeholders, the industry is increasingly finding that customers are more likely to have relationships with multiple service providers and less likely to engage in face-to-face interactions with their bankers, courtesy today’s digital, on-demand, 24x7 available avenues available to consumers. While most financial institutions have embraced digital technologies, there are still a lot of challenges to overcome for this industry as we move forward. Most of these challenges emanate from competitive and compliance requirements.
Some of these unique challenges include:
Harnessing Technology to Drive Innovation
The future is an exciting time for the financial industry as technologies like blockchain and artificial intelligence (AI) present opportunities to overcome the challenges that have impeded growth and innovation. These technologies – which enable machines to simulate and augment human intelligence along with increased transparency and security – have finally come of age and are being used increasingly. Financial organizations are also progressively venturing into this intelligence age, along with intense pressure from all fronts including fierce competition, digital disruption, technological evolution, etc. Although AI technology continues to evolve and blockchain continues to broaden its scope and impact across various financial domains, these technologies already have the capability to provide tangible, real-world outcomes today. Whether its robotic automation replacing repetitive manual tasks, human workers augmented with enhanced judgment, robots replacing humans in the front office, enhanced security, traceability and transparency across transactions, these technologies have started to drive growth, profitability, and sustainability.
Let’s look at a few ways in which these technologies are transforming the financial industry today.
Conclusion
The Fintech revolution is out of its infancy and is gaining major strides. Driven by new technologies like AI and blockchain, it has started to have a huge impact on the way traditional financial businesses operate. This revolution presents businesses, entrepreneurs, and investors with the renewed motivation to seek out every opportunity that encourages them to continue disrupting this space further and drive financial institutions to transform into technology solution companies. It is exciting to see, this space getting transformed.