Advanced technologies are transforming the finance world in radically new ways to enhance the speed, security, transparency, and efficiency of financial services. Among these technologies, blockchain, a type of Distributed Ledger Technology (DLT), has proven to be an essential tool in the fintech arsenal, altering the financial landscape significantly. It is due to blockchain, new markets have come up, and banking services are now accessible to previously excluded demographics, including the ones with limited access to traditional banks, low income, and no credit history. Today, the fintech companies are fiercely racing against each other to develop the most sophisticated blockchain platform, capable of supporting various transaction types in diverse scenarios. This competition is fierce and for good – it’s prodding innovation and creating new opportunities for growth in the financial industry.
But is blockchain truly a revolution?
It’s a valid question to ponder, given the significant impact that it has had on catalyzing change in the financial system.
The Future with Fintech and Blockchain
The future of the financial industry looks promising as emerging technologies and changing consumer behaviours are paving way for new opportunities. Financial institutions will need to adopt new strategies to stay competitive. This will enable them to unlock new levels of efficiency, security, and customer satisfaction.
Here are a few ways in which fintech companies and blockchain will benefit the financial industry in the coming years.
- Enhanced security and increased efficiency
The blockchain-based platforms will continue to advance more and offer highly secured, efficient means of processing transactions that will make them a powerful tool, bolstering the entire financial system.
Blockchain transactions facilitate direct transactions between parties and don’t require intermediaries for validation. They rely on a public ledger so whenever a transaction is initiated on one node of the network, it is quickly processed and verified by all other nodes. This decentralized approach ensures accuracy, faster transaction, enhanced productivity, and reduced costs compared to traditional financial systems. With their tamper-proof ledger, they also safeguard sensitive data from cyber threats, ensure clients’ privacy, and prevent fraudulent activities.
- Transforming customer experience
The future will also see financial institutions relying a lot on fintech and blockchain-based innovations to enhance their services with personalized solutions powered by data analytics and AI. The main focus will shift towards making banking more economical and convenient and shifting control of ownership and management of data to the customers. Continued collaboration between financial institutions and technology companies will be crucial in driving the industry forward and providing an exceptional customer experience.
- Improved financial compliance and risk management
The financial industry will continue to be empowered by fintech companies, blockchain, and other innovative technologies to address the challenges posed by evolving regulations and financial crimes. Improved transparency, tracking, and reporting capabilities provided by AI-data analytics and innovative advanced technology based solutions will allow proactive risk detection, their mitigation, as well as regulatory compliance requirements.
- Innovative growth opportunities
The coming times may see the integration of advanced technology solutions that will completely eliminate intermediaries, automate processes, and enhance productivity. This, in turn, will allow redirecting resources towards growth, innovation, and improving customer experience, resulting in a win-win scenario for all stakeholders.
Diversification of revenue streams and development of more agile and innovative customer-centric business models may top their list. Digital currencies may become a norm and meeting the demand for digital payment solutions will be possible by integrating these technologies into the system. The result will make way for new revenue streams, more secure payment options, and products and services catering to specific customer segments.
The future of finance lies in technology and the industry revolution is upon us. Let’s not forget that with any new technological advancement, come challenges, along the way. Regulatory compliance, cybersecurity, and interoperability issues will continue to pose significant obstacles till the widespread adoption lasts. It is necessary for financial institutions to collaborate, innovate and develop solutions to ensure a secure and sustainable financial system.
The journey ahead may get a bit rough but with the potential benefits of fintech and blockchain adoption, the industry is set for better times. The future possibilities for growth, efficiency, enhanced security, and customer-centric experience are enormous with this technology adoption. How well the industry leverages these technologies using their full potential, to create a more inclusive financial system for everyone, is what will ultimately determine the impact of technology on the financial sector.
By embracing innovation and actively working to address the needs of all individuals, including those who have been traditionally underserved, the industry has the potential to transform the way we think about and interact with money. Whether this potential is fully realized remains to be seen, but one thing is certain: the future of finance is closely tied to the ongoing evolution of technology, and those who are willing to adapt and innovate are most likely to succeed in creating a more inclusive and equitable financial system for everyone.
About the Author
Soman Dubey is theChief Technology Officer,Fintech, APAC at Accolite Digital. and the views expressed in this article are his own)