Digital Transformation in Finance Industry

Financial services technology (FinTech) is presently amidst of an intense transformation, as organizations prepare to clutch the next major juncture of digital transformation. In a cutthroat competitive environment of inflation pressure, where swift action and reaction is essential, financial institutions must accommodate their technical functionalities to hold up digitization of both the front and back ends of their organization. Major financial institutions are apprehensive of the necessary action and have plunged on the required transformation.  

Digital transformation has become an indispensable part of the business strategy in the finance industry. The finance application development ensures swifter processes, compliance with regulatory requirements, ease and convenience of use, cost effective operations and improved customer experience. The emergence of digital transformation trends in the finance sector led to rise of Fintech becoming extremely beneficial for financial companies. FinTech has improved notably since the ATM and credit/debit card days to the newer digital/online banking and blockchain technology. FinTech with AI and MI algorithms are revolutionizing the world of finance. The customer service chatbots, expenditure tracking tools, and online budgeting tools are few examples of how financial services have evolved. Digital Transformation is evident from simple branch offices to ATM to UPI based mobile apps due to the greater convenience and ease of use customers also have taken the plunge towards digitized finance operations for a better experience. 

There are several forces driving financial institutions towards digitization, Past two years when people have majorly stayed indoors, most of them were motivated to adopt digital technologies which has now become a habit and people have accustomed to it. To give better customer experience, organizations must cope with the trend and innovate their method of providing digital financial services. Retailers are in a race to set up e-commerce capabilities to boost and expand sales volume and customer base. With most consumers embracing online commerce, there has been an acceleration towards digital contactless payments. 

Ever since Digital Transformation has gained significance several trends have emerged in the FinTech sector- 

• Mobile Banking – Online/Internet Banking allows customers to transfer funds, deposit funds, receive funds, apply for loans easily from their mobile phones on the application, website of the respective Bank or third-party financial service provider apps. Increased number of customers prefer to use mobile banking at their fingertips as it allows 24/7 access, almost trivial waiting time, and ease of use. Mobile banking has changed the way of functioning of banking and financial sector to a significant extent and is expected to grow furthermore.
• Blockchain Technology - Blockchain is gaining thrust steadily and will play a vital role in digital payments, loan processing, escrow facilities, insurance, and other services. Over and above that, Blockchain will be used in RegTech; a recent technology that uses information technology to streamline regulatory processes, to avoid regulation breaches.
• Big data - Big data is universal. Banks and other financial institutions are using machine learning to process data and derive analytics and come to a solution effectively. Eventually, this will assist financial institutions to acquire more investment and develop a positive environment for employees and consumers.
• Automated Wealth Management Tools - Artificial Intelligence (AI) is changing several industries with automation, using complex algorithms to calculate the yielding investment opportunities, suitable loan providing institutions, profitable interest rate, and so on. This is helping people achieve their business objectives accurately and with great returns.  

Digital Transformation made everybody's life easy during the covid19 pandemic, though it was a development priority before covid19 pandemic, it has now become the essence of Finance sector for both long-term and short-term. In an outline, digital transformation has a substantial impact on the fintech sector. Around the globe, banks and various other financial institutions have started reaping the benefits of digital transformation and automation through FinTech application development. To be candid and as evident, traditional financial service providing organizations need to embrace new and innovative digital business models for transforming their processes and staying ahead of the curve.