Within the financial services industry, some of the used technologies include artificial intelligence (AI), big data, robotic process automation (RPA), and blockchain. A brief about all of these technologies in FinTech is explained below:
1. Artificial Intelligence:Artificial Intelligence is a general term for many different technologies. In terms of the "FinTech" industry, AI is used in various forms. AI algorithms can be used to predict changes in the stock market and give insight into the economy. AI is used to provide insight on customer spending habits and allows financial institutions to better understand their clients.
2. Chatbots: A chatbot is a software application used to conduct an on-line chat conversation via text or text-to-speech, in place of providing direct contact with a live human agent. A chatbot is a type of software that can automate conversations and interact with people through messaging platforms. Chatbots are another AI-driven tool that banks and FinTech industries are using these days to help with customer service.
Deploying a chatbot saves time, money and resources. Improve Customer experience by providing faster resolution and better customer service. Thus, also helps considerably in reducing operational cost.
3. Big Data: Big Data is another technology that financial institutions can utilize. In the finance sector, big data can be used to predict client investments and market changes and create new strategies and portfolios.
Big Data can be used to analyze customer spending habits and therefore improve fraud detection. Big Data helps banks create segmented marketing strategies and can be used to optimize the operations of a company.
4. Robotic Process Automation: Robotic Process Automation is an artificial intelligence technology that focuses on automating specific repetitive tasks. In terms of FinTech, RPA is used to perform manual tasks that often are repetitive and completed daily. RPA helps to process financial information such as accounts payable and receivable more efficiently than the manual process and often more accurately. RPA can be used to increase the productivity of the financial company.
5. Blockchain: Blockchain is another financial technology that is being used in the industry. Out of all the "FinTech" technologies, blockchain was developed for the purposes of finance. The main feature of Blockchain in financial services is decentralization where it is not required to trust a third party to execute transactions. Though blockchain is still an emerging technology, many companies recognize the impact that it will have and are investing accordingly. In a nutshell, FinTech is the root of innovation operating at the intersection of financial services and technology.
Other forms of FinTech technologies act to supplement and enhance existing financial services. These include services such as transferring funds between banks by companies such as Plaid (company) and augmenting payroll services for consumers by companies such as Clair.
