There’s no two ways about it, change is afoot within the world of finance. Every day, we hear about new developments in the fintech (financial technology) world. However, the wider financial sector is also developing a new identity as we prepare to move into the next decade.
Technology is redefining the way people and businesses bank. This continued digital revolution is giving rise to machine learning, artificial intelligence (AI), cloud computing and decentralised platforms such as blockchain that are on a one-way ticket to disrupting the global financial services sector in the coming years.
Blockchain: The new ‘back office’ for financial services?
Once viewed purely as the foundation for Bitcoin, the financial industry has come to understand its potential in many other areas. This decentralised distributed virtual ledger which operates across tens of thousands of machines sees every single transaction recorded with unprecedented precision by the blockchain network.
It’s the most transparent payment system the world has ever seen. It will soon be utilised not only to transfer cryptocurrencies, but many other assets. These will include commodities such as equities and bonds.
High street banks, insurers, and various other firms in financial services are investing millions in blockchain technology. They hope that by providing a faster, tamper-proof payment and exchange infrastructure – removing the need for expensive middlemen – the integrity and trust in service providers will rise immeasurably as a result.
AI: More efficient decision-makers and trend-spotters
It’s of little surprise that AI ranks highly as a likely addition to the financial sector by 2025. Machine learning has already made it possible for humans to create automated algorithms. These make accurate predictions, spot market trends and take necessary actions. Algorithmic trading bots have been in action for many years in the stock markets. However, AI is also increasingly being used as a sophisticated deterrent for money laundering and fraudulent behaviour. It may soon also be used to monitor online customers behaviour, helping to up-sell financial products.
Chatbots: 24/7 virtual agents offering dedicated service support
In the infancy of chatbots, many consumers were sceptical about why businesses were stooping so low. It seemed like an under-hand attempt to slash overheads but in reality, it has been a revelation for the financial industry and many others. The ability to source vast amounts of data and provide services and advice off the back of customers’ queries has helped individuals and businesses make more informed choices with their financial products.
In the coming years, we’re likely to see chatbots evolve into highly sophisticated virtual agents. They will potentially be capable of completing both part and full-time advisory roles. There’ll still be front-of-house customer service, but not as we know it.
Cybersecurity will be more necessary than ever before
While this financial era is exciting, it’s important to keep our eye on the ball when it comes to cybersecurity. The bigger the scale of digitisation in banking and financial services, the more windows of opportunity cyber-criminals will have to strike. The fintech industry is already responding and developing tougher cryptography to keep hackers at bay.
Is your business planning to get involved with fintech research? Discovering the beneficial possibilities for you and your customers over the next decade isn’t the only upside. Your business could also be eligible for R&D tax relief.
On average, we secure £72,000 in R&D tax relief for its clients, which can be reinvested back into their businesses. We work with a broad range of companies from start-ups to larger, more complex companies to help innovative and ambitious businesses claim the R&D tax credits they are rightfully owed.