by Guy Morley
What is FinTech?
According to industry experts PwC, financial technology (FinTech) describes the evolving intersection of financial services and technology. It refers to startups, tech companies, or even legacy providers. It relates to products and companies that employ new digital features and online technologies in the banking and financial services industries. Every digital transaction, whether it is online shopping, currency exchange, stock investments, or money transfers, is possible at our fingertips thanks to FinTech, and of course the influx of smart phones and smart apps.
Why has it only recently grown in profile?
The UK Fintech sector is booming. We are witnessing phenomenal growth in the sector due to technological advancements and the fourth revolution, which has spurred enormous support and investment, giving traditional banks a run for their money. FinTech usually focuses on mobile functionality, big data, accessibility, agility, cloud computing, contextuality, personalisation and convenience. These have become much more accessible and reachable with recent developments in cloud computing, big data and personalisation.
The use of technology in financial services offers some great benefits to both the company and the consumer. Firstly the use of technologies allows you to operate existing financial services at lower costs, but also allows consumers to benefit from new tech-driven solutions that offer an enhanced product or service.
As a result of this, it is no surprise that many banks are now actively seeking to collaborate with FinTechs and developers to not only drive innovation, but to deliver the enhanced, personalised services demanded by their customers in an ever growing digital era. Many financial institutions including Barclays, Citibank, Goldman Sachs have accelerator programs for FinTechs, whereas BNP Paribas, HSBC, UBS and Deutsche Bank have invested in FinTech firms which offer solutions across personal finance, wealth management, lending and payments.
The extent to which FinTech is soaring is evident globally, and in some countries, governments are even extending efforts to financial support via tax incentives and grants in attempts to attract FinTechs and developers to their financial centres to collaborate. In other regions, a more honourable approach is being taken, as educational support is encouraged to future-proof against skills shortages, with academia and financial firms collaborating to create FinTech-related graduate training schemes and degree courses. All of these examples of investment in FinTech illustrate the mighty emphasis on the importance of this sector in the future.
Here are some ways in which Fintech is changing the game for the financial services industry:
Chatbots for customer service – Using natural language processing and machine learning to continuously learn from human interactions, ‘chatbots’ or ‘virtual assistants’ are becoming a popular tool for banks to operate customer-facing interactions such as general queries.
Machine learning and AI for fraud detection – According to McKinsey, the adoption of machine learning and AI can transform anti money laundering operations by offering new efficiencies. For instance, it can filter through unstructured transaction and account data to enable a faster and more reliable transaction validation. It can also predict the possibility of fraud and attacks before they occur, reducing manual effort by nearly 50%.
Biometrics for stronger security – There is a lot of interest in finding ways to use biometrics like vocal patterns, irises, thumbprints, and facial recognition, to add an extra layer of authentication for transactions. Biometrics promotes security and enhanced usability by enabling quick authentication, avoiding the frustration that comes with remembering multiple passwords.
Blockchain for digital transactions – Cryptocurrencies are taking the banking world by storm by providing users with faster and cheaper ways to transact. Blockchain is transforming payments for banks as well as customers by reducing the cost and time taken to transfer money.
Revolut is the UK’s star $1.7 billion FinTech Company, which has recently been awarded its European banking licence. It is a digital banking alternative that offers a pre-paid debit card, currency exchange, cryptocurrency exchange and peer-to-peer payments. It aims to offer customers a secure, mobile-based current account that allows you to hold, exchange and transfer without fees in 24 different currencies. The app launched only 3 years ago and already has 3 million customers and is aiming for 100 million customers in the next five years. This is a prime example of a FinTech company appealing to customers who want to navigate their bank from their fingertips.
Join the future of FinTech
There is no better time than the present for developers to get involved in the booming FinTech industry. Many startups and legacy banks are actively growing their teams as part of efforts to change the future of finance, and are all looking for tech developers. If you have the skills required for a career in FinTech, Advento has a number of roles available for developers and software engineers. They are available to view here: https://www.adventostaffing.com/jobs/all
Alternatively, if you would like to get in touch about our bespoke recruitment services, please email: email@example.com