How The Development Of Fintech Is Changing The Finance Industry

FinTech. An abbreviation that took our world by surprise, and has become if not Australia’s but our world’s most valuable asset that our economies and consumers dearly depend on. Our generations emerging technology can significantly and incredibly influence the finance industry of the future, specifically for Australian consumers, through the era of and technologies of Digital Banking, Digital Disruptors, AI and Machine Learning, Blockchain and Fraud Detection. The development of digital is changing the finance industry in many ways. Technologies such as cloud computing, analytics, and robotics are the most innovative digital tools reinventing the core ideologies of banking and finance.

There was a time when big banks offered incentives for opening an account. They would send out goodies in tote bags and funky calculators and microwaves which gave way to promises of low fees, no fees, free checking, cash back, and more. All were done so as they were based on the notion of capturing the customer through the door where the 'sale' could be made. Nowadays, not only is the idea of having an application that controls your financial data and decisions at instant speeds a pro but an expectation. This expectation heavily influences the future for Australian consumers, as the big 4 banks now compete with each other for superior mobile banking and have launched applications such as BeemIt to ensure they keep Australian consumers satisfied. Digital banking puts financial power at the customers’ fingertips. One digital banking app — either accessed through mobile or online — saves time on transactions that have historically taken 20-30 minutes at a traditional brick-and-mortar bank. Managing money has never been easier for customers with quick access to bill pay tools, person-to-person money transfers, and loan management. True digital banking gives the customer access to any and all banking services without driving to their local branch, which put into context, is priceless for banks in the current Australian economy.

Evolving technologies in today’s society have always had an extremely significant impact on Australian businesses because of how they can improve the current process. Specifically, Artificial intelligence is one of the most influential topics in information technology world due to the vast opportunity it offers to benefit from its use. Not many industries have the capabilities to fully explore the potential of AI as much as the finance industry does. Its speed, accuracy, and efficiency are extremely important for business. AI and machine learning bring a great deal of importance to the financial industry through their use of algorithms in day to day tasks. At the heart of the artificial intelligence there are some utmost important algorithms which are self-learning and help the finance industry if brought the correct data. There are multiple fields in finance which will eventually benefit from the implementation of artificial intelligence and could prove to be of great value to Australian consumers, specifically in the current economy. However, there are specific technologies that are being implemented and are positively influencing the finance industry for Australian consumers.

One technology is the rise of chatbots, which are computer programs that use speech recognition or text based interface to emulate human conversation, and is becoming an extremely popular case of AI in Finance customer service. The majority of businesses are implementing the power of chatbots to provide consumers with readily available financial information. The world-renowned bank HSBC has developed “Amy”, a customer service virtual artificial intelligence chatbot that provides support to consumers inquiries in English as well as traditional and simplified Chinese. American express has also tagged on the machine learning and AI trend in their “Amex bot for Facebook Messenger” intelligence which allows some consumers to get information instantly regarding queries about personal financial data.

The rise of the emerging technology of Blockchain has caught the FinTech world by surprise and is extremely impactful on Australian organisations and consumers. Transactions can be made instantaneously, minutes or seconds, while currently, settlements can take up to a week. With the implementation of Blockchain, debt and loan settlements can become user optimised which saves a significant amount of time and financial needs. This is further emphasised that the majority of the finance sector heavily relies on information technology. Blockchain will also exterminate the requirement for the majority of middle and back office employees at financial institutions as transactions will settle instantly. Henceforth, banks have an important mission to pursue Blockchain for improving settlements within the Australian economy. This is being seen in organisations today in our society already and are a big part of the future for the FinTech industry. Banks are experimenting with instant settlements such as the Bank of Canada. The bank ran a test in 2018 with the Toronto Stock Exchange (TMX Group) and non-profit organization Payments Canada. Their results indicated that automating instant securities settlements becomes possible with blockchain, enabling direct swapping cash from all parties resulting in instantaneous settlements. Furthermore, when transactions get settled almost instantly they remove a significant part of the risk that the parties involved cannot meet its obligations, which is a possible high-risk level expense for banks.

In conclusion, it is evident that emerging technology in the current FinTech industry can significantly and incredibly influence the finance industry of the future, specifically for Australian consumers, through the era of and technologies of Digital Banking, Digital Disruptors, AI and Machine Learning, Blockchain and Fraud Detection. As such, through technologies such as cloud computing, analytics, and Blockchain emerging technologies within the FinTech industry can influence the economy for Australian consumers significantly. 

16 December 2021
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