A

MINI PROJECT REPORT

ON

“INNOVATION AND TECHNOLOGY IN FINANCIAL SERVICE

INDUSTRY”

For the partial fulfilment of the requirement

for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

Under the Guidance of : SUBMITTED BY:

DR. SHRUTI SRIVASTAVA RITIKA NEGI

Name of Coordinator:

DR. JASPRIT KAUR

GREATER NOIDA (U.P.)

Dr. A.P.J. ABDUL KALAM TECHNICAL UNIVERSITY,

LUCKNOW

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 Certificate

I RITIKA NEGI, Roll No…… from MBA-1ST Sem, of Mangalmay Institute of

Management & Technology, U.P. hereby declare that the Mini Project-I(KMBN 152)
entitled INNOVATION AND TECHNOLOGY IN FINANCIAL SERVICE
INDUSTRY is an original work and the same has not been submitted to any other Institute
for the award of any other degree.

Date: Signature of the Student

Certified that the Mini Project-I (KMBN 152) submitted in partial fulfillment of Master of
Business Administration (MBA) to be awarded by Dr. A.P.J. Abdul Kalam Technical
University Lucknow by _________________________, Roll No. ________________ has
been completed under my guidance and is Satisfactory.

Date: Signature of the Guide

Name of the Guide:

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 STUDENT DECLARATION

I, RITIKA NEGI, bearing University Roll No...................... of A .P. J Abdul Kalam Technical
University, Lucknow, U.P., enrolled as student of MBA at Mangalmay Institute of Management
& Technology, Greater Noida, solemnly declare that the project report titled, „INNOVATION
AND TECHNOLOGY IN FINANCIAL SERVICE INDUSTRY‟ embodies the results of
original research work carried out by me and same has been submitted in any form partially or
fully for award of diploma or degree of this or any other University/Institute.

Name: RITIKA NEGI

Roll No:

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 Executive summary

In the past 30 years’ information technology has had a widespread presence in

many industries. Since the 1980s about half of all major capital investments in
firms have been information technology based . The competitive nature of the
economic business world has tremendously increased due to technological
advancements.

Progressive financial services companies are on the lookout for new technologies
to improve efficiency and speed of service, as well as provide better customer
experience. Exponential growth in information technology has prompted
companies to leverage digitization of banking technology to transform the
financial services industry through customer experience management.

Research has proven that technology is a critical factor in the development of

strategies for firms. Technology has allowed improvements to firm processes and
enables firms to operate efficiently and profitably. Examples of improvements by
technology in business processes include: - cutting costs;

- enhancing customer service and quality;

- enabling firms to enter new markets;

- and creating new business opportunities.

In broad, technology has transformed various industries, with the financial

services industry being one of the industries experiencing pervasive technological
disruption and advancement.

In the last ten years, the financial services industry has experienced a significant
increase in technology based services delivery.

Technology adoption of the financial services industry contributes to a number of

benefits for the clients such as:

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- being able to manage one’s money in a better and quicker way;

- having mobile access to financial services;

- avoiding lengthy processes; and

- having fewer barriers to national and international transactions.

The benefits of technological developments for financial firms include:

- cutting overall costs;

- reducing call center traffic;

- improving efficiency;

- strengthening client service;

- deploying high-end analytics to make informed investment decisions;

- and providing an opportunity to elevate business performance and gain

competitive advantage.

However, with all the benefits and capabilities technology provides to the financial
services industry for both clients and firms, technology acceptance by clients is not
yet fully exploited. According to a global research study by NPO Emfa in 2015
financial services firms are failing to fully technological innovation.

The study proved that the banking industry performs less than 10% of their sales
via digital technology. The reason therefore is that financial services firms lack the
link between digital channels and their ability to support customer experiences.

The financial services industry is looking at improving online customer service

enabled by competition with consumer brands like Amazon, Facebook, and

Google. Importantly, most financial services executives feel improving the

customer experience to be the top driver of digitization in banking.

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The advent of smart analytics allows financial services companies to mine the
wealth of consumer data to understand and service customers better. Technology
has also helped organizations develop innovative financial services. The
development of better payment systems is a key challenge for organizations.
There is also the possibility that robo-advisory will be a significant application in
the future. Similarly, blockchain-based services will gain in popularity in the
coming years.

Digitization of financial services is an ongoing revolution. Enterprises have the

choice of making innovation the focus of a stand-alone organization or they may
integrate it throughout their organization. This demands “great engineering.” Firms
will do well to have a full stack of engineers who can introduce dynamism to deal
with innovation while adopting a start-up approach.

Evolving technologically is at the heart of efforts to serve customers better through

customer experience management. Adopting new banking technology is, therefore,
critical for financial services organizations to thrive.

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 CONTENTS

TOPICS

1. Introduction
2. Industry profile
3. Evolution of use of technology in the industry
4. Upcoming technology advancement in the industry
5. Conclusion
6. References

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 Introduction

The financial services sector provides financial services to people and

corporations. This segment of the economy is made up of a variety of
financial firms including banks, investment houses, lenders, finance
companies, real estate brokers, and insurance companies.

As noted above, the financial services industry is probably the most

important sector of the economy, leading the world in terms of earnings and
equity market capitalization. Large conglomerates dominate this sector, but it
also includes a diverse range of smaller companies.

According to the finance and development department of the International

Monetary Fund (IMF), financial services are the processes by which
consumers or businesses acquire financial goods.

For example, a payment system provider offers a financial service when it

accepts and transfers funds between payers and recipients.

This includes accounts settled through credit and debit cards, checks, and
electronic funds transfers.

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Companies in the financial services industry manage money. For instance, a
financial advisor manages assets and offers advice on behalf of a client.

The advisor does not directly provide investments or any other product,
rather, they facilitate the movement of funds between savers and the issuers
of securities and other instruments. This service is a temporary task rather
than a tangible asset.

The strength of the financial services sector is also important to the prosperity
of a country's population. When the sector and economy are strong,
consumers generally earn more.

This boosts their confidence and purchasing power. When they need access
to credit for large purchases, they turn to the financial services sector to
borrow.

Financial services sector is one of the most important segments of the

economy.

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 Industry Profile

The economy is made up of many different segments called sectors. These sectors
are comprised of different businesses that provide goods and services to
consumers. The companies that are grouped together in a sector provide a similar
product or service. For instance, companies that offer agricultural services make
up the agricultural sector. Corporations that provide mobile or cellular telephone
services are part of the telecommunications sector.

The financial services sector provides financial services to people and

corporations. This segment of the economy is made up of a variety of financial
firms including banks, investment houses, lenders, finance companies, real estate
brokers, and insurance companies.

As noted above, the financial services industry is probably the most important
sector of the economy, leading the world in terms of earnings and equity market
capitalization. Large conglomerates dominate this sector, but it also includes a
diverse range of smaller companies.

According to the finance and development department of the International

Monetary Fund (IMF), financial services are the processes by which consumers or
businesses acquire financial goods.1 For example, a payment system provider
offers a financial service when it accepts and transfers funds between payers and

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recipients. This includes accounts settled through credit and debit cards, checks,
and electronic funds transfers.

Companies in the financial services industry manage money. For instance, a

financial advisor manages assets and offers advice on behalf of a client.

The advisor does not directly provide investments or any other product, rather,
they facilitate the movement of funds between savers and the issuers of
securities and other instruments. This service is a temporary task rather than a
tangible asset.

If the financial services sector fails, though, it can drag a country's economy down.
This can lead to a recession. When the financial system starts to break down, the
economy starts to suffer. Capital begins to dry up as lenders tighten the reins on
lending. Unemployment rises, and wages may even drop, leading consumers to
stop spending.

In order to compensate, central banks lower interest rates to try to boost

economic growth. This is primarily what happened during the financial crisis that
led to the Great Recession.

The Financial service industry is a very vast field comprising of various different
sector in itself such as :

• Banking Industry
• Investment Industry
• Insurance industry
• Tax and Accounting industry

Evolution of use technology in the industry

IoT, AI, blockchain and cloud computing are some of the technologies driving
change in how consumers interact with those they purchase from and how they
manage their money.

Although traditional financial services players may consider FinTech a disruptor of

their industry, those that are embracing technology innovation are transforming
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the industry from the outside in, and succeeding in areas traditional players have
failed in.

Originally built in a pre-digital world, financial markets are seeing a good deal of
disruption and innovation. The use of artificial intelligence (AI) and machine
learning is allowing algorithmic or automated trading in the stock exchanges.

Data processing and analysis tools and technologies have increased automation,
specifically in asset rebalancing. Additionally, cloud-based, robo-advisory-enabled
platforms are using algorithms to advise users about investment and asset
management.

Fintech companies are now leading the industry and are creating a wide range of
new financial products and services, with the purpose of making money
management easier and more effective.

1886-1967 is about infrastructure

This is an era when we can first start speaking about financial globalization. It
started with technologies such as the telegraph as well as railroads and
steamships that allowed for the first time rapid transmission of financial
information across borders.

The key events on this timeline include first transatlantic cable (1866) and Fedwire
in the USA (1918), the first electronic fund transfer system, which relied on now-
archaic technologies such as the telegraph and Morse code. The 1950s brought us
credit cards to ease the burden of carrying cash. First, Diner’s Club introduced
theirs in 1950, American Express Company followed with their own credit card in
1958.

1967-2008 is about banks

This period marks the shift from analog to digital and is led by traditional financial
institutions. It was the launch of the first handheld calculator and the first ATM
installed by Barclays bank that marked the beginning of the modern period of
fintech in 1967.

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There were various significant trends that took shape in the early 1970s, such as
the establishment of NASDAQ ,  the world’s 1st digital stock exchange, which
marked the beginning of how the financial markets operate today. In 1973, SWIFT
(Society For Worldwide Interbank Financial Telecommunications) was established
and is to this day the first and the most commonly used communication protocol
between financial institutions facilitating the large volume of cross border
payments.

The 1980s saw the rise of bank mainframe computers and the world is introduced
to online banking, which flourished in 1990s with the Internet and e-commerce
business models. Online banking brought about a major shift in how people
perceived money & their relationship with financial institutions.

By the beginning of the 21st century, banks’ internal processes, interactions with
outsiders and retail customers had become fully digitized. This era ends with the
Global Financial Crisis in 2008.

2008-Current is about start-ups

As the origins of the Global Financial Crisis that soon morphed into a general
economic crisis become more widely understood, the general public developed a
distrust of the traditional banking system. This and the fact that many financial
professionals were out of work, led to a shift in mindset and paved a way to a new
evolution in finance industry. So, this era is marked by the emergence of new
players alongside the already existing ones.

Payment transfers though smartphones or smartwatches are another example of

Finance service advancements many consumers have adopted today.

Another important factor that shaped the face of finance industry is the mass-
market penetration of smartphones that has enabled internet access for millions
of people across the globe. Smartphone has also become the primary means by
which people access the internet and use different financial services. 2011 saw
the introduction of Google Wallet, followed by Apple pay in 2014.

While PayPal has been in this game for a long time, relative newcomers like
Venmo, TransferWise and Zelle are revolutionising how we share money for
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common interactions like splitting a bill and selling items to friends. Add to that
the rise in crowdfunding sites like GoFundMe that allow nearly anyone to create a
simple way for those who care about a person, situation, or cause to contribute
with a few clicks.

Some of the Financial services which are developed as an app are –

• Google pay
• Phone pe
• Amazon pay
• Paytm
• MobiKwik

The financial services industry has evolved at an incredible rate in recent years,
underpinned by rapid advances in technology. In fact, expleo group’s consumer
research into people’s attitudes toward technology revealed that 62% of people
consider easier and faster banking one of the best technological developments of
the past decade. And it seems traditional banks are listening, with 56% now
putting digital disruption at the heart of their strategy.

At the same time, rather than going away as traditional banks would have hoped,
younger banks like Monzo and Starling have matured into formidable rivals for
customers and their cash, putting pressure on the rest of the financial services
sector to step outside its comfort zone, innovate rapidly and embrace a fail-fast
culture. As we look into the future, technology is only going to play a bigger role
across the banking sector. With that in mind, we’ve outlined the biggest tech-
driven trends we can expect to see in 2022 and beyond that financial services
need to take note of.

Digital becomes mainstream –

Two decades ago, many large financial institutions built “e-business” units to
ride a wave of e-commerce interest. Eventually, the initial “e” went away, and
this became the new normal. Internet development, and large technology
investments, drove unprecedented advances in efficiency.

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 Today’s “digital” wave has the same markers: separate teams, budgets, and
resources to advance a digital agenda. This agenda extends from customer
experience and operational efficiency to big data and analytics. In financial
services, we have seen this approach applied to payments, retail banking,
insurance, and wealth management, and migrating toward institutional areas
such as capital markets and commercial banking.

Robotic Process Automation -

The introduction of the robotic process automation (RPA) has an important

role to play when it comes to designing pre-decided rules of an application
while dealing with data. This usually helps in saving administrative costs and
time. RPA handles and simplifies the whole process of services by storing logs
of processes and report generation with zero errors.

RPA helps in solving complex problems in a minimal period of time with

literally zero human error. It executes pre-programmed functions that help
financial institutions in reducing time and cost.

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Conversational User Interface and Chatbots –

The conversational user interface is an automated program that is specifically

designed to help users have a conversation with a service just how they would
have a human conversation. A user can ask a variety of questions about the
service in a conversational manner and the interface replies accordingly. This
program has pre-programmed keywords in store which get triggered once
customers ask a question whose answer is already stored in the program.

A major challenge is to gather information about common questions which a

customer is likely to ask regarding any financial service.

Biometrics – especially around mobile payments

Mobile payment innovations could do away with traditional wallets entirely as

global consumers become less reliant on cash. Google, Apple, Tencent, and
Alibaba already have their own payment platforms and continue to roll out new
features such as biometric access control, inducing fingerprint, and face
recognition, which is likely to become the preferred route of access over the next
decade.

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Data Analytics -

Having data is one thing, utilizing it effectively is another matter. Analyzing

data to extract actionable insights is the basic role of data analytics in the
financial sector. Data analytics is the process of understanding accumulated
data to devise strategies, to attain business insights, to detect fraud, or the
development of a product in the most effective manner.

Data analytics also helps financial institutions to gauge their previous

performances and plan a future strategy. It also helps in scrutinizing tasks in
hand and optimizes them along with other processes.

Greater collaboration between fintechs and traditional

banks –

While many financial institutions are continuing to adopt new technology to

enhance operations and improve customer service, Fintechs provide exciting
avenues for ongoing innovation. Already, financial institutions have realised
they must learn how to use fintech to their competitive advantage, and this is
only going to continue in the years ahead.

Cybersecurity –
All aspects of life in the modern-day world have gone digital. This includes
our financial services as well. All customer-related data is quite sensitive in
nature and is vulnerable to cyber-attacks.

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Keeping this threat in mind, financial institutions constantly work to develop a
strong cybersecurity net. Their effectiveness ensures safety as well as
compliance with regulations laid down for financial institutions.

Tech-first is the only approach -

A tech-first approach is now the only approach. How banks leverage RPA,
Blockchain, Chatbots and Biometrics will determine their ability to tackle cyber
risk and compete with highly scalable alternative banking providers, who are
reducing the lending cycle down from a few weeks to a few hours.

Businesses are digitising their customer journeys and scaling-up

transformation. They’re finding more agile ways of working, boosting
productivity, building key skills of the future in-house and modernising with
targeted investment in technology, data, testing, assurance and information.

If innovative technology is implemented incorrectly, then there can be a severe,

negative impact not only in terms of working ability but a knock-on effect in the
form of consumer trust. Something no business can afford to lose…especially at
this time. This can all be avoided by embedding continuous quality to help drive
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digitalisation and innovation. Combined, they achieve excellence in execution
and help to deliver greater cost-efficiency, by identifying and mitigating
business risk at every step.

The way mobile phones have changed consumer behavior and how people access
the internet is also very important. The below table shows countries with highest
people who use financial services from their mobile phones.

Table 1.0 In the coming years it will not be a surprise if India surpasses China in
terms of usage of technology in Financial services. China and India are the
emerging and biggest market in technological innovation in finance service
industry.

Upcoming technology advancement in the industry

It’s no secret that we live in an age where financial and technology sectors are
growing hand in hand. This joint growth is often attributed to the fintech industry

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which is leveraging traditional banking services with technologies like artificial
intelligence, blockchain, mobile services, etc.

As one of the most ancient tenets of human societies, money and finance have
been constantly evolving with advances in technology and science. As technology
continues to take leaps and bounds and permeates every aspect of life, we can
expect banking and finance to change.

While the new ways of providing financial services to the people are being created
on a regular basis, we already have many practical solutions in the market.

As we look towards the future there are many exciting technology awaiting
humans and about which we already have information, infact big tech companies
are using experimenting on these. Some of them are discussed as following.

Advances in robotics and AI will start a wave of ‘re-

shoring’ and localization –

We are already seeing alliances between leading incumbent financial services and
technology companies, using robotics and AI to address key pressure points,
reduce costs, and mitigate risks. They are targeting a specific combination of
capabilities such as social and emotional intelligence, natural language processing,
logical reasoning, identification of patterns and self-supervised learning, physical
sensors, mobility, navigation, and more. And they are looking far beyond
replacing the bank teller.

Robotics encompasses a broad spectrum of technology and, according to the

survey, it’s making deep inroads into the financial services industry. Robots come
in many forms, from physical devices such as customer service robots in retail
settings to software robots that take the controls of business applications.
Software robots are part of the growing field of robotic process automation

Already, some robots can sense the details of their environments, recognize
objects, and respond to information and objects with safe, useful behaviours.
(Sceptical? You shouldn’t be. Self-driving cars have performed very well in real-

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world tests.) Over time, they will be able to perform not only more tasks, but
more complex tasks. Service robots are in the early stages of a long development
cycle, and they still face some big technological hurdles. In the next three to five
years, we expect modest, evolutionary gains. After that, though, we anticipate
rapid gains, as new models combine increasingly powerful and standard modular
platforms with the ability to learn.

The public cloud will become the dominant

infrastructure model –

As significant as the shift toward cloud-based computing has been, it is just

getting started. Today, many financial institutions use cloud-based software-as-a-
service (SaaS) applications for business processes that might be considered non-
core, such as CRM, HR, and financial accounting. They also turn to SaaS for ‘point
solutions’ on the fringes of their operations, including security analytics and KYC
verification. But as application offerings improve and as COOs and CIOs get
comfortable with the arrangements, the technology is rapidly becoming the way
that core activity is processed. By 2020, core service infrastructures in areas such
as consumer payments, credit scoring, and statements and billings for asset
managers’ basic current account functions will be well on the way to becoming
utilities.

Blockchain –

Blockchain is certainly one of the most popular buzzwords in the fintech industry
today. It’s touted as a secure, transparent, and faster payment solution compared
to the traditional options.

The application of blockchain in the industry has been discussed time and again,
and most of the leading financial institutions in the world are already building
projects upon it. For instance, there was a blockchain trial recently which
supported the idea of smarter or programmable money that can be used in

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budgeting, insurance pay-outs, and management of charities and trusts in the
world.

One of the most realistic applications of blockchain in today’s banking sector is in

KYC i.e. Know Your Customer (KYC) on which the financial institutions spend up to
500 million USD per year, according to a Thomson Reuters Survey. These
institutions can save a lot of money by using blockchain which can carry
independent verifications of different users on the central network. This way,
once the verification process is completed with one bank or NBFC, then others
can access the details of the same through the same network without having to
start all over again.

Another major application of blockchain in the fintech industry is smart contracts.

These can be used for high-value transactions and agreements in which security is
of utmost importance. Here is how it works- a computer program is created in
which the terms and conditions involving two parties are created. Once the
conditions are met by both parties as per the contract, then a specific action can
be taken by the program itself.

A good example of how smart contracts can be used is crowdfunding websites.

Rather than the traditional format, if these websites use smart contracts, then the
donations can be held in a secure account which doesn’t have a single owner and
is also bound by an unbreachable code. The funds collected by the account can
then be released by the program if the conditions given in the contract are
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successfully met by the project owners. In this way, there is no need for a third
party and no risk of the organizers running away with the money without keeping
their promises.

RegTech –

Regtech is the management of regulatory processes within the financial industry

through technology. The main functions of regtech include regulatory monitoring,
reporting, and compliance.

Regtech, or RegTech, consists of a group of companies that use cloud computing

technology through software-as-a-service (SaaS) to help businesses comply with
regulations efficiently and less expensively. Regtech is also known as regulatory
technology. Regtech is a community of tech companies that solve challenges
arising from a technology-driven economy through automation. The rise in digital
products has increased data breaches, cyber hacks, money laundering, and other
fraudulent activities. With the use of big data and machine-learning technology,
regtech reduces the risk to a company’s compliance department by offering data
on money laundering activities conducted online—activities that a traditional
compliance team may not be privy to due to the increase of underground
marketplaces online.

Regtech tools seek to monitor transactions that take place online in real-time to
identify issues or irregularities in the digital payment sphere. Any outlier is relayed
to the financial institution to analyze and determine if fraudulent activity is taking
place. Institutions that identify potential threats to financial security early on are
able to minimize the risks and costs associated with lost funds and data breaches.

Regtech companies collaborate with financial institutions and regulatory bodies,

using cloud computing and big data to share information. Cloud computing is a
low-cost technology wherein users can share data quickly and securely with other
entities.

A bank that receives huge amounts of data may find it too complex, expensive,
and time-consuming to comb through. A regtech firm can combine complex

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information from a bank with data from previous regulatory failures to predict
potential risk areas that the bank should focus on. By creating the analytics tools
needed for these banks to successfully comply with the regulatory body, the
regtech firm saves the bank time and money. The bank also has an effective tool
to comply with rules set out by financial authorities.

Regtech can quickly separate and organize cluttered and intertwined data sets
through extract and transfer load technologies. Regtech can also be used to
generate reports quickly. It can also be used for integration purposes to get
solutions running in a short amount of time. Finally, regtech uses analytic tools to
mine big data sets and use them for different purposes.

Regtech operates in various spheres of the financial and regulatory space. A

number of projects that regtech automates include employee surveillance,
compliance data management, fraud prevention, and audit trail capabilities.

A regtech business can’t just collaborate with any financial institution or

regulatory authority as it may have different goals and strategies that differ from
the other parties. For example, a regtech that seeks to identify credit card fraud in
the digital payments ecosystem may not develop a relationship with an
investment firm concerned with its employees’ activities online or the Securities
and Exchange Commission (SEC) whose current issue may be an increase in
insider trading activities.

The various area of Ragtech intervention are:

• Data management
• Reframing regulation and implementing new governances

• Real time reporting

• Data – analytics decision

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Augmented Reality –

Immersive technologies such as Augmented, virtual, and mixed reality are

enhancing customer experience across the board. So why can’t they do the same
for banking customers?

The possibilities of the implementation of augmented reality technology in

banking sector are only limited by imagination, though these are still in a very
early stage of development. The end-state is to give customers complete
autonomy in actions and transactions they could perform at home. Hybrid
branches are envisioned by technology experts who believe that bank branches as
we know them today are a thing of past.

One of the implementations of augmented reality technology in banking sector,

that is already live, has been made by the Commonwealth Bank of Australia. They
have created a rich date augmented reality application for their customers who
were looking to buy or sell a home. It provides them with information like current
listings, recent sales, and price tendencies to help the customer make better
decisions.

Compared to the desktop or mobile experience, VR/AR design is not limited by

the screen size. Although it might be tempting to display all possible information
at once, this wouldn't be a great idea as it could cause cognitive overload and
frustrate the user. In the case of VR/AR banking design, it's especially important
to remember that the main criterion for quality is simplicity.

The number one bank in the world will be a technology company,” as predicted by
Brett King, Founder of Moven, and this truly holds its ground. The progressive
financial brands that are aiming to become the leaders of the future banking have
already started to develop their inner digital competencies. This increases their
ability to instantly adapt their service to any kind of digital platform.

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Quantum Computing –

Quantum computing is a way of using quantum mechanics to work out complex

data operations. As is common knowledge today, computers use bits that can
have two values – 1 or 0. Quantum computing uses “quantum bits” that can
instead have three states – 1 or 0 or both. This unlocks exponential computing
power over traditional computing – when the right algorithm is used.

Quantum computers perform calculations based on the probability of an object's

state before it is measured - instead of just 1s or 0s - which means they have the
potential to process exponentially more data compared to classical computers.

Classical computers carry out logical operations using the definite position of a
physical state. These are usually binary, meaning its operations are based on one
of two positions. A single state - such as on or off, up or down, 1 or 0 - is called a
bit.

This represents a huge leap in computing power, but any commercial

implementations are still decades away. Nevertheless, firms like JPMorgan Chase
and Barclays are investing in quantum computing research in partnership with
IBM.

In quantum computing, operations instead use the quantum state of an object to

produce what's known as a qubit. These states are the undefined properties of an
object before they've been detected, such as the spin of an electron or the
polarisation of a photon.

Smart Machines –

You must have already seen assistants like Amazon’s Alexa and Google Home in
action. Can you imagine the impact these could have on banking applications?

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In fact, Bank of America has already developed Erica as a virtual assistant
specifically for banking operations. These smart machines are beginning to act as
digital concierges for the customer in interacting with banks as well.

Banks will have to invest in digital engagement to ensure long lasting relationships
with the customer. Remember that customers will gravitate towards banks that
are easiest to work with when they are using technologies that they have become
habituated to.

Machine learning –

Similar to AI, machine learning helps create a marketing campaign around the
consumer. It enables you to understand what kind of services will attract your
target market. For example, how people find a financial website, what page they
clicked, and what services the need.

Machine learning algorithms and their capability for sentiment analysis will
impact trading significantly in the future. It involves using enormous volumes of
unstructured data such as photos video transcriptions, social media posts,
presentation, webpages, blogs articles and business documents to understand
the market sentiment.

Sentiment analysis will transform the future financial market and many believe
that machine learning will be central to development.

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 Conclusion

Technology in finance is no different than other disruptive technologies across

various industries. Technology has become more of lifeblood of the banking and
finance industry. Its impact has been so substantial and widespread, that’s it’s
nearly impossible to imagine one without the other. History has shown that the
future is very hard to predict, and many things can happen that will change the
equations and dynamics that govern the financial industry. But at the end of the day,
the people who innovate will be the key to what unfolds in the next years.

One thing’s for sure- banking services and personal finance are to become simpler,
more secure and accurate with time as the emerging technologies will mature and
be applied in the existing products across all facets of the industry.

Finally, the focus of technology implementation must be customer experience –

and not revenue or cost savings. Those are important but will come
automatically if you can retain customers in the years to come.

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 Reference
• https://www.investopedia.com/ask/answers/030315/what-financial-services-
sector.asp
• https://www.pwc.com/gx/en/industries/financial-
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• https://thefinancialbrand.com/77228/technology-trends-disrupting-financial-
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• https://www.technology.org/2019/06/03/technological-advancements-in-
finance-brief-overview/
• https://expleogroup.com/2021-financial-trends/
• https://www.hlb.global/fintech-and-the-future-of-
finance/#:~:text=The%20use%20of%20artificial%20intelligence,to%20pred
ict%20possible%20future%20events.
• https://thenextweb.com/news/5-tech-trends-that-will-redefine-finance-in-the-
next-5-years
• https://www.wowso.me/blog/technology-in-banking
• https://www.raconteur.net/smart-machines-spot-fraud-and-assess-risks-in-
banking/
https://www.sciencealert.com/quantum-computers

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