written by Tomi. E Alimi
Edited by Araoluwa Abdulazeez Ogundairo
Revolutionizing the Banking and Investment service sector
What exactly are Financial Technologies?
In simple terms, they are NEW TECHNOLOGIES that seek to improve and automate the delivery and use of financial services.
In 2021, McKinsey estimated that artificial intelligence (AI) can generate up to $1 trillion in additional value for the global banking industry annually. Banks and other financial institutions would therefore adopt an AI-first mindset.
Some time ago people had to queue for hours to get a bank statement or withdraw cash. Financial Technologies have revolutionized the service landscape, with about 46% of people now using digital channels exclusively for their financial needs. Traditional banking is quickly being replaced by tech-advanced services which are making financial services easier, safer and cheaper.
In addition, the advent of Big data has allowed financial services companies to extract a wealth of consumer data to understand and service their customers better.
What impact do Financial Technologies have on Investing?
Financial Technologies have made the investment sector more accessible. An example is ALGORITHM TRADING. These are a computerized way of buying and selling financial instruments at very high speeds in accordance with predefined rules and guidelines given to computer systems. It involves using computer programs to make trades based on defined algorithms fed into the program. Algorithm trading can also analyse insightful data and make relevant decisions much faster than a person could. This allows investors to take advantage of fast, computerized and accurate decision-making tools. It automatically updates, and adjusts strategies as prices, volumes and market volatility change thus reducing investment mistakes that can be caused by human error.
Fintech is revolutionising the financial landscape and completely changing how people manage their finances. Today, more and more startups are entering the sector looking to help deliver improved financial services to consumers. The fast-paced growth of this industry has not only caught the eye of financial institutions but big tech companies as well.