How Automation is Transforming the Fintech Sector?[Updated December 2021]

Automation is the future of every industry let alone the fintech sector. If you are integrating AI into your system it means that you will be deriving methods from the common aspects of human intelligence. The only difference here would be that its execution would be beyond the scale of human capabilities.

How the integration of Automation in Fintech is Shaping the new Finance Sector in 2021 and Beyond?

Financial software development companies leverage AI and ML technologies to get a deeper understanding of the consumer finance needs in the sector which has made banking significantly easier. Every major bank-related task can be now performed online through any device and from anywhere with a good internet connection. Fintech offerings are not just limited to consumer finance,  forex solutions, insurance claims service, but there are many more in the list. Along with fintech, many trends are believed to shape the industry in 2021 and beyond.

  • Robotic Process Automation (RPA), whereby advanced technology and robots are now able to perform tasks that were previously performed by humans.
  • To encourage more transparency, you integrate blockchain technology into your financial transactions.
  • AI and ML. – The sector will be highly characterized by machine learning (ML) and Artificial Intelligence (AI).
  • The adoption of Biometric Security Systems, allows people to perform most banking tasks remotely.

Top Fintech Automation Trends that are Disrupting the Industry

Even though the pandemic of covid-19 has damaged the economy worldwide, the fintech sector has been getting stronger and stronger. Embracing the new reality of the world and the state-of-the-art technologies, FIntech is growing more than ever especially with the use of Artificial intelligence.

After the integration of AI in the Fintech sector, it is successfully disrupting the way financial operations are carried out. As you have also noted now that most of the financial services can now be handled through mobile apps which open up a great many opportunities for the customers.

Top 7 ways How Automation is Transforming the  way Fintech Companies do Business 

1. Analyzing the Credit Worthiness of a Customer

If the fintech company or the client themselves want to assess their overall financial health then AI can do it for you. It can examine your credit accounts, cash accounts, and investment accounts. AI can also offer customized advice based on the new inputs or incoming financial data of the client. This comes in handy for the banks in cases of keeping up with the real-time changes.

Banks and other financial institutions have huge chunks of data related to their customers that they had to process. They had to analyze and compare this data to check whether the client can qualify for the product or services they are demanding.

2. Process Control and Optimization with Process Automation

In any industry, process automation is one of the important drivers for the growth of AI. and Now, that has developed into more sophisticated cognitive processes automation that is responsible for performing the most complex automation processes in the finance sector.

The storm of digital transformation is taking on every industry like it has become some kind of an inevitable reality. So, finance companies are leveraging technology to streamline all their business operations. As digitalization is taking over rapidly, companies are doing away with manual work to make their business processes more and more effective.

And it is just not about financial operations, fintech companies can imply processes optimization in many fields like sales and marketing, accounting, call centers, employee training and development, and many more. The more the processes are being automated, the more will be the productivity of the company.

3. Fraud Detection

When it comes to finances, one has to be always on the lookout for fraud. That has been a constant problem in the finance sector. But with the help of artificial intelligence, fintech companies can now instill predictive analytics into their fraud detection workflows that could reduce the false positives at a significant rate.

The user’s behavior patterns are learned and monitored through AI analytical tools which gather and analyze the consumer data. This data is used to look for some rare and warning signs of any kind of fraud occurrences and attempts. 

It is also said that some state-of-the-art fraud detection and money laundering solutions can detect fraudulent transactions with more than 90% of accuracy. This can be a real growth accelerator for all types of financial services providers, especially credit card companies.

4. Customer Support

Automated bots have been in the market for a very short time but have managed to gain huge popularity. Financial organizations are really looking up to them for customer support services. These bots are installed on websites, software, and other apps to enhance the interactions with the customer.

AI chatbots have proved to be very helpful amidst the covid pandemic when people had to live with social distancing and lockdown regulations. Even in such times of travel restrictions, finance businesses have managed to solve the issues of their customers remotely by taking advantage of using AI chatbots for customer support service.

5. Increased Use of Automated Virtual Financial Assistants

Automated virtual assistants can collect all your financial history, check up on your account balance, search history to anticipate your behavior pattern, and give important financial advice. They can also monitor stocks and bond prices. They offer customized advice to traders based on their financial goals and personal portfolio.

6. Precise Decision-Making

If you look down the data and then make a decision then it will always be an informed decision. The fintech companies launch their own fintech apps that usually come with data visualization tools. These tools can break down the complex data sets and simply represent them that an ordinary citizen can understand. That ought to provide the customer with some deep insights which would enhance their financial decision making.

Automated machines can analyze business data and offer the most practical suggestions. These data-driven recommendations can change how things were managed in the company. So, instead of being prone to human errors, managers can opt to base their decisions on AI machine-generated information.

7. Predictive Analysis

The success of any business depends on how well they can anticipate the current market trends and predict the future ones too, especially in the finance sector. Predictive analytics by artificial intelligence is used to enhance resource optimization, sales nurturing and revenue generation in a fintech company.

Predictive analysis improvises business operations that give finance agencies an edge over their competitors in the market. It can be a real game-changer in the case of financial services offerings. Because machine learning algorithms are used to render custom solutions that are unique to every customer.

Final Thoughts!

With the advancement of technology, it won’t be exaggerating to say that AI and ML can be the future of the fintech industry. The adoption of AI and automation in the banking sector can help them have more effective and technically smart business operations.

So, it is highly recommended that you analyze your business operations and check which one of those needs to be integrated with AI and automation technology. They can help you offer top-notch quality customized solutions.

Categorized as IT

Elizabeth Howard is a seasoned writer who loves to write on topics related to Business, Finance, Marketing & Energy Markets. Well known for her eloquence, Liz is a full time contributor to a dozen top notch publishing portals.