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Next-gen technology transformation in financial services

September 26, 2024

 

Table of Contents:
Introduction
Artificial Intelligence and Machine Learning Tech
Blockchain Technology-Next-Gen Tech
Robotic Process Automation (RPA)-Next-Gen Tech
Cloud Computing-Next-Gen Tech
Big Data and Analytics-Next-Gen Tech
Cybersecurity Concerns-Challenges & Considerations
Regulatory Compliance: Challenges & Considerations
Skill Gap and Training
Future Trends- Quantum Computing
Future Trends-Automation In Various Fields
Future Trends- Internet of Things (IoT)
Future Trends-5G Technology & AI
Conclusion

Introduction:

The next generation of the financial world demands a faster, smarter and more secure environment. From helping you manage money better, to protecting your information, these new tools are changing the game of finance. With the traditional system, big banks have been around for a long time, but they were slow and clunky. Their computer systems are outdated, making it hard to keep up with the latest ways people want to manage their money. Security can also be a topic of concern, plus young age people who are used to technology might find these banks frustrating. And so there’s a need to transform the entire system.

In this blog, we’ll explore the way technology is transforming the financial sector, the advancements we will witness in the next generation, their impact, and much more. We will also explore how artificial intelligence and machine learning are entering many more areas of the financial world to quickly detect unusual activities and prevent fraud. 

Next-gen technology transformation

Double exposure of creative artificial Intelligence abbreviation and hand working with a digital tablet on background. Future technology and AI concept

AI and ML Tech

Artificial Intelligence has changed the financial sector. Monitoring your transactions and spotting any unusual activities within, helps banks detect and curb fraud. To answer your questions AI-driven features like Chatbots and virtual assistants are available 24/7. For example, if you want to know about your account’s balance, instead of waiting for customer service, you could simply ask the chatbot. It will immediately tell you the answer.  Not just that but AI also analyses your data to offer personalised financial advice, such as personalised financial advice, making banking services more efficient and customer-focused.

Blockchain Technology-Next-Gen Tech

Transactions are secure as blockchain uses codes to scramble your information, making it super tough for hackers to steal. All transaction details are visible to authorised parties. So, those involved in a transaction can see exactly what’s going on, making tracking easier. Additionally, transactions are faster and more efficient. Today, the transaction is completed in minutes instead of days when you transfer money from Dubai to India.

Robotic Process Automation (RPA)-Next-Gen Tech

RPA automates repetitive tasks, like processing applications or updating records, freeing up real people to answer your questions and give you better service. Banks use it to handle account opening processes.

Cloud Computing-Next-Gen Tech

Cloud services can easily expand with growing needs. If you need more storage for your money info, the cloud can easily grow bigger as needed. The cloud helps banks manage all their data storage and analytics securely in one place, reducing the need for expensive hardware or even maintenance.

Big Data and Analytics-Next-Gen Tech

Banks analyse large datasets to make better choices by understanding customer behaviour, like what loans to offer or how to improve services. This way banks or any financial firm will have a better understanding of customer behaviour.

Cybersecurity Concerns-Challenges & Considerations

  • Financial institutions such as banks handle so much information, be it account details or personal data. So, the need to protect all this information from getting leaked is of utmost importance.
  • Banks and other financial organisations use encryption, which means special codes to make your data secure and can only be read by trusted and authorised parties. However, regularly updating the codes and security helps prevent breaches.
  • Cyberattacks are not an unknown thing to people now and so ensuring safety is a top priority. They are on the rise and emerged as a threat to the financial sector. To swiftly identify and respond to threats, firewalls are used. Antivirus software is used to identify and eliminate such apps and software, hence limiting fraud access.

Regulatory Compliance: Challenges & Considerations

Institutions must follow strict rules to protect your money and make sure things are safe. Likewise, countries should make stringent laws to maintain trust among users. For example, in Europe, the General Data Protection Regulation makes sure that banks are extra careful with their personal information and keep things clear about how they use it.

Integration with Legacy Systems

  • Many financial institutions rely on legacy systems—older technology that has been in use for years. Bringing in new technologies when there are existing systems, can be challenging. 
  • When banks get new software, they need to make sure the new system can get along with the old one. It’s like needing an adapter so your new phone charger works with your old phone. This takes careful planning, a tech team who knows what they’re doing, and some adjustments to make everything work together smoothly.
  • Implementation in phases, where the new technology is introduced in stages, allows the team to test and adjust. Backup systems ensure that services remain available during the transition.

Skill Gap and Training

  • New technologies require new skills. Ensuring that employees are trained to use these technologies is essential for smooth operations. In the future Banks should focus more on offering workshops, online courses, and hands-on training sessions to help employees learn how to use new systems smartly.
  • In banks and even in other financial institutes, there may be a shortage of technical employees which will be in demand in the coming years. There’s a need to address this gap by either training the existing employees or hiring new people who are well-versed in the field.
  • Partnering with Sphere IT to hire the top technical team is one way by which banks can save a lot of time and effort. There’s a whole recruitment procedure, which is time-consuming and lengthy. 
  • Sphere IT, does shortlisting, interviewing and all the processes of recruitment for technical resources for banks so that they can focus more on their core business activities, such as improving customer service and developing new financial products.

Future Trends- Quantum Computing

Quantum computing which uses quantum bits (qubits) to process complex calculations could revolutionise areas like encryption and risk analysis, making financial transactions more secure and data analysis more efficient.

  • Future Trends-Automation In Various Fields

Routine tasks will be increasingly automated, allowing financial institutions to focus on strategic initiatives. As a result, personalised services driven by AI and big data will become the norm, offering customers tailored financial products and advice. Additionally, cybersecurity and biometric authentication advances, such as face ID or patterns replacing passwords, will enhance transaction security. In the future, this could lead to less dependency on traditional banks, enabling you to manage your money more directly.

  • Future Trends- Internet of Things (IoT)

It establishes a connection between common devices and the internet, perhaps resulting in improved management of assets and personalised banking experiences. For example; wearable devices provide real-time spending alerts or smart ATMs that anticipate customer needs based on usage patterns.

  • Future Trends-5G Technology & AI

The next generation of mobile internet connectivity offers faster speeds and more reliable connections. AI continued advancements in AI and analytics will lead to more intelligent systems which Improve customer insights, for better decision-making.

Conclusion

All these terms like AI, cryptocurrency blockchain etc. might sound new or fancy to you, but they are the future of the financial world. You get a basic idea about what the future holds in this sector. We have discussed the importance of next-gen technologies, including RPA, cloud computing, big data and much more. Considering all these, we can state that the financial industry has a bright future ahead. While there are challenges like cybersecurity and technical resources, these can be managed with careful planning and the right partnerships.

For inquiries and consultations, and to discuss how your bank thrives in the digital age, reach out to Sphere IT(https://sphereitglobal.com/) or contact +97142853268 or send an email to info@sphereitglobal.com.

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