In some aspects, the financial industry may not seem like a main candidate for technological innovation. After all, banks have existed for thousands of years. And today, they are highly regulated, which makes it difficult to facilitate innovation. Traditional banks provide a relatively narrow set of commercial products and services, leaving little space to introduce new illegal occupants.
However, despite this, today’s financial industry is actually a case study in innovative technological solutions. Upon realizing that its competitors are innovation and the market that are interrupted, they will lose ground if they do not keep up to date, financial companies of all kinds, from new companies to large banks established, are aggressively investing in technology, so they help more.
Let’s take a look at some examples of innovation in the financial industry that shows how technology can be used as a tool to maintain a competitive advantage in constantly changing markets.
Why finance need technological innovation
Before looking at the real world examples, let’s consider some of the complex challenges that financial institutions aimed to resolve.
One is the fact that the needs and desires of their customs are changing. We live in a digital world first, and customers expect financial institutions to adapt to that world allowing them to do everything online.
At the same time, there is a boost towards what could call “democratization” in the financial industry. 2008 was a springboard for a great innovation to begin in the industry, combined with the advent of decentralized finances and products such as service, underline the passion that consumers feel today to escape a world where a handful of large banks dominate the industry. In other words, customers want more choice and flexibility.
Technological innovation in action: five examples
Here is a look at how financial institutions in all the different main subsegments are responding to these challenges through the development of innovative technological solutions.
Wise borders without borders
Traditionally, moving money through political boundaries is exensive. Banks charge high rates for cross -border transfers. And in addition to this, transfers can take several days, which leads to a bad customer experience.
Wise, a company based in the United Kingdom, has adopted technology as a means to eliminate friction that traditionally hindered cross -border payments. By providing a web interface where consumers can transfer money quickly and easily through borders, Wise allows a much more positive customer experience for cross -border transactions. Wise also grants a priority to transparency by ensuring that the client knows exactly what exchange rates they will pay. This strategy interposes with the expectations that finance should not be such a hard and upstream industry.
Arnie aligns investment with ideology
Traditionally, employees who wish to put money in a retirement account between a set of generic index funds. They have little control over what they are investing, which means that they can end up putting money in companies whose missions do not support for ethical or ideological reasons.
Arnie aims to change this by providing a 401K investment options that companies can adapt to adapt to their missions and the priorities of their employees. Using the service, employers can sacrifice the GEARARD RENEWABLE ENERGY retirement funds, for example. It is another example of how financial institutions are adapting to a world where consumers expect a democratized financial experience.
Bring high contact financial services to the masses
In the past, practical investment tips were only available for media people. If you want dedicated and personalized assets management services, you needed a rather beautiful management investment portfolio. All others were trapped trying to discover how to administer their money on their own, because it was a profitable niece for banks sacrifice high -touch services to lower customers on the network.
An alignment of new financial companies, such as the front of wealth and nutmeg, are changing this formula through the use of technology to automatic heritage management services. The result is the orientation of asset allocation, investment advice and even tax minimization strategies that are available for all, regardless of income.
The financial revolution of equal to equal
What would happen if I could borrow money directly from other ordinary consumers, instead of having to trust large and centralized banks to approve it for a loan?
With sites such as Landing Club and Landingtree, you can. These companies allow peer finances, which allows people who want to borrow money to connect with people willing to lend it. Think about Airbnb or Uber, but for finance.
And it is not always for the developed nations that this type of finance occurs. International companies focused like Kiva, a microfinance company and a beneficial organization supported by Cisco, can start with loans only $ 5 to help people meet their needs for small businesses. With most of these loans for women, it is a good story and may change life.
Transform insurance with all instantaneous and a social conscious
Many people claim that insurance is a necessary evil and that is just what Lemonade, an American insurance company, he says. Therefore, its mission is to transform the insurance of a necessary evil into a social good. Its main technological innovation is that the claims payment process is instantaneous.
They really lean in artificial intelligence and chatbots to see everything. Maya, the company’s chatbot, guides buyers through claims or the insurance contribution process. They promote how fast it is to obtain insured claims and collect. And where the tremors also differentiate is that they treat premiums as their money, so they work with customs to give leftover funds (“cousins”) to beneficial organizations.
Innovative technological solutions help evolve finances
What all these initiatives have in common is that they are liver technology to boost innovation in an industry that, historical, was not exactly known for being fast to evolve or adapt.
In doing so, they are building much better experiences and taking finance to the 21st century. They are creating transparency, allowing decentralized interactions and providing consumers with more options, while guaranteeing a competitive advantage for financial institutes that adopt technological innovation. This opposes sitting in their laurels and expecting that they can somehow ignore the modern and digitized world.
See how we are adopting new technologies by making bold bets at Cisco Emerging Tech and Incubation.
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