The digital world continues to grow exponentially, with other industries, such as the FinTech industry, which is evolving at a staggering speed. This is because so many technologies are being introduced that are gradually bringing more automation, convenience, and transparency to all businesses worldwide.
For example, in particular, financial services have gone online, and customers can now deal with their accounts using digital banking, payments, and many other products that was unimaginable a decade ago.
This is good news for businesses that can use the increased data and customer analytics to their advantage when it comes to providing better service, which helps them meet customer demands much more effortlessly.
Role of Technology in the Automation of Industries
Companies that process a large amount of data each year, like banks, payment processors, and even other tech companies, can drive over 80% of new product growth based on insights that come from analyzing the data.
A prime example is Grofers - an Indian online grocery delivery platform that was founded in 2013 to meet the growing demand for home-delivered groceries.
Grofers (now known as blinkit) mainly uses big data gathered from their store’s Android and iPhone apps to improve their business decision-making. As a result, they are currently ranked among the top 50 start-ups chosen by Nasscom in 2016.
Additionally, they recently received funding from leading investors such as Sequoia Capital and Singapore government-backed fund Vertex Venture Holdings.
Now more than ever, technology has changed the existing financial ecosystem. As a result, new players, start-up companies specializing in financial technology and existing tech companies, have started providing services that banks historically provided.
At the same time, increasingly digitally-savvy customers, including millennials and post-millennials, expect convenience while also demanding a higher level of customer service experiences through mobile or tablet platforms.
What pushed the growth of technology in the finance sector?
The ongoing threat of COVID-19 has caused a significant increase in the overall number of people adopting digital technologies.
Financial companies were among the first to respond, illustrating their dedication and focus on staying as efficient and competitive as possible.
It has been a driving factor behind the push for financial institutions to prioritize digital transformation in the coming years because they want to maintain low costs while continuing to impress and attract customers.
A cross-country comparison shows that the global digital divide appears to be a reality. Although they are improving overall and there are improvements, only 25% of the people in third world countries use services provided by big-name banks like Wells Fargo or Citibank.
However, eventually, many of us hope that this will change and more people from third world countries can take advantage of using products like Robo advisors, blockchain, and artificial intelligence if their own country does not have local tech support for it.
While online personal loans are already a major product of FinTech companies, most of our banking needs will likely be based online in the coming years. They will have computerized/robotic assistants offering quality advice.
Here is why big data can only bring benefits to the banking sector.
Enhanced view of customer profiling
One of the most important roles a customer-facing representative can play is bridging the communication gap between the sales and marketing teams and the customers.
The first step toward this end is by making sure you understand how different segments of your consumers think about your company, run their finances, and conduct their day-to-day lives.
This knowledge will help you to tailor your communications for each segment, which will, in turn, positively impact how your leads think about contacting you with queries or complaints. With this kind of strategy in place, you’ll easily be able to leverage big data analytics to develop a completely personalized customer experience.
Better risk assessment
When participating in the FinTech market, one can encounter many different kinds of risks.
One way to take the edge off is by using data visualization to gather all relevant information from several sources and subsequently combine this information into a single place where trends can be pinpointed and other pertinent information can be extracted.
The analytics that comes from gathering such data help the FinTech industry make strategic plans for certain situations, and it’s easier to develop these strategies thanks to the big data analysis which comes before them.
Suppose one wants to be successful in the FinTech sphere. In that case, it’s best if they participate in events like hackathons where they can collaborate with people who have experience dealing with risk management concerns.
Fraud is an oddly common problem, whether it be in the financial services industry or elsewhere. However, by analyzing data collected from multiple sources to ensure that everything adds up and checks out, fraud can be easily identified and defused before it causes problems for either customers or businesses.
This helps create a secularized business model that allows customers to get involved with FinTech opportunities concurrently protecting their information and keeping them safe when they choose to do business online.
Forecasting future market trends
By becoming more aware of the past and present trends in the market, investors have even more insight into which direction the marketplace may be headed.
That helps traders make well-informed investment decisions, thereby improving the experience for everyone involved. Additionally, predictive analytics with the use of Big Data help streamline FinTech operations like optimizing cash flow, offering competitive rates, etc., for improved customer retention.
Ensures friction-less multi-channel experience
As the banking industry is going through a massive shift from traditional to digital, the financial services industry is adopting data analytics that helps track consumer patterns and assist in enhancing the user experience.
Owing to these factors, many financial service platforms are able to provide a more personalized experience for each user. In addition, with real-time data, these organizations can also address issues experienced by customers on their platform directly so as not to dissuade them from continuing to do business with them, which goes back to increasing retention rates.