The finance and banking industry is one of the most volatile of all the business-industries in the world.
It is so because changes in government policies or finance-related industries such as technology, automation etc, have a direct impact on the former.
The year 2018 was a turbulent year for the world economy and currency value, and 2019 will be no less surprising.
Let us have a look at 3 most crucial financial trends to watch out for in 2019.
1. Rise of Artificial Intelligence (AI) Technology
Computer systems are already on the verge of advancement. Today, these are equipped with the power to function like a human brain.
Artificial Intelligence or AI technology is a part of this advancement, which helps financial institutions to enhance revenue, decrease costs, improve customer experience, and reduce fraud given cognitive automation.
Artificial Intelligence also depicts a potential to replace human functions and in the case of sales activities and analyzing data of customers. It will bring better insights into consumer behaviors through the conceptualized approach of decoding consumer responses.
One of the examples of AI service for banks is the chatbot technology, which is widely incorporated today in online marketing and sales communications.
How Will AI Impact the Finance Sector in 2019?
AI tools are utilized to create a deep domain-specific knowledgebase and expertise. After which, the related tasks are automated.
- These also take on to cognitive technology that engages with people and leverage understanding power regarding content (text/video/image).
- AIs can unlock the potential of unstructured data like financial news and industrial report and provide personalized engagement between customers and banks.
- These can offer customers personalized products, thus increasing the scope of interaction with consumers and revenue generation.
AI’s Cognitive Insights and Compliance for Banking
Artificial Intelligence delves in cognitive insights that work by extracting relationships and concepts from different data streams and creating relevant and personalized answers, inconspicuous earlier in a mass of unstructured and structured data.
- The AI insights will detect a real-time key pattern and relationship, drawn on a large quantity of data across several sources to revive actionable and deep insights.
- A huge volume of transactions and data that require screening for market manipulation, third-party risk, money laundering, and insider trading, can be monitored by AIs.
- The future of AI in the financial sector will thus boost, given its growing need in compliance, especially in banking and investment management.
AI machines will also serve as a means to enhance the learning and implementation of financial compliance and new technology to adopt automated and digitized compliance.
Thus, Artificial Intelligence technology certainly has a bright future in 2019 for the finance world.
2. Mobile Banking and Online Fund Access
Consumer behavior a decade back, was a lot different than what it is today, thanks to the overwhelming technological growth taking over the finance and the banking industry.
As mobile banking is becoming more and more popular, the profitability of banking services now depends on the faster reach to millennial customers via mobile network and services than tapping the same by establishing a greater number of physical branches of financial institutions.
How Popular Are Online Loans and Banking Today?
People today prefer a better money transferring network, which helps them access money on the fingertips.
- Fine examples of online banking are payment wallets and money transfer mobile apps, which are made for the sole process of easing payments and money transfers online.
- Similarly, the lending system is also expanding on the internet. Right from peer-to-peer lending, small cash loan and short-term lending to a credit card and a personal loan, every kind of borrowing option is available on the web.
- The need of a quick, accountable, and simple process of accessing money through internet, especially on smartphone and computer has made it mandatory for financial giants to comply and respond to this change in consumers’ preferences.
This is why today, we see a number of banks and NBFCs turning their focus on online marketing and communication with the customer than what used to be in past, when traditional banking was at a peak, than virtual.
3. Growing Importance of Cryptocurrency in Blockchain
In 2015, investing in Bitcoin and other Cryptocurrencies cost just a few hundreds of dollars. Since then, the value of Cryptocurrencies has skyrocketed immensely.
Cryptocurrencies depend on the blockchain technology, which relies on a global network to manage a shared database that records transactions on a public ledger. It has a strong security, equivalent to having break into each and every computer to gain access to a database.
How Will Blockchain Improve the Finance Sector?
Talking about the relevance of blockchain in the finance space, in 2018, the former assumed significance in mortgage lending.
The digital ledger of blockchain has made the transaction and documentation process much secure compared to the paper-intensive process in the lending sector. It is not hard to understand that if manual documents get destroyed, the loss would be huge.
- The transactions can be thus, rather be conducted via a network, whose access is granted to just a few, protecting against tampering and possibility to drain away cash.
- All the processes can happen in real-time. This is how in 2019, blockchain can facilitate regulatory compliance.
- Lenders and banks can shift to recording transactions in the blockchain ledger, which then cannot be easily compromised.
Thus, the lending procedure will become cheaper, faster, and more secure due to the distributed ledger technically. It will also eliminate the need to manually process loan documents and manage paper-based assets.
While, it is hard to say how Cryptocurrency and blockchain will impact the lending sector at large, it will be interesting to note how the blockchain technology gradually makes its own mark in the industry.
The above-given financial trends of 2019 are truly disrupting and shall change the face of the economy for many countries and financial institutions.
Be on a watch on how these trends make a big difference in the coming years, not just in the finance sector, but across other industries as well.