Like any other industry, financial services organizations have notably focused on the reduction of costs. However, thanks to the drastic change of the business environment in recent years, this sector is now faced with the double challenge of keeping up with the regulatory demands as well as with the preferences of a tech-savvy generation which actually wants to access banking and other financial services with the help of apps and instantaneous data access. They virtually want to perform all their financial tasks online or through apps. Today, if they are accessing the internet to perform regular banking facilities like checking account balance, transferring funds etc, they don’t hesitate to complete more elaborate functions like applying for loans online as well.
On the other hand, the list of regulatory requirements is only growing every day. Not only are the financial services required to comply with the reporting requirements, but they should also testify to the quality of data they have reported on. Traditional technologies have not really been able to help these financial organizations address these challenges. Though they are effective in collocating data, they have failed to prove their efficacy when it comes to making the available data more usable. Needless to say, the financial services industry has embraced modern technologies to simplify operations. Let us explore ways in which modern technology has transformed finance.
They have embraced the usage of semantic technology
It can well be said that the use of modern semantic technologies has not only helped the industry to meet regulatory requirements with ease but also increase their revenue. Let us explore how. The only way to increase revenue is to sell more. In order to sell more banks and other financial service providers have to know their customers well- what they actually buy, how exactly they have responded to the products and services offered by particular financial companies and ways in which they interact with the financial service providers. Semantic technology opens up a well-rounded view of customer interactions through social media, transactions, accounts and interactions. Data accumulated from these sources can be used to make recommendations for the next steps.
When it comes to meeting regulatory needs, semantic technology facilitates ways in which banks try to check identity theft, money laundering and other types of financial fraud. Banks are required to accumulate data from global sources to fulfill responsibilities pertaining to KYC (Know Your Customer). Thanks to the semantic technology, financial analysts can now easily add new data and ask new questions pertaining to the data without really turning to their IT department.
They have resorted to fast automation of high margin processes
Firms like FutureAdvisor and Wealthfront have gone on to automate an entire group of wealth management services including investment advice, wealth management and tax maximization. Customers can now access the full suite of these services online without really having to shell out a hefty cost for the same.
They are increasingly resorting to strategic details
Today, if you end up applying for the best egg loans, then lenders will definitely check your credit scores before approving the loan. On the other hand, if you apply for insurance, carriers would ask you to furnish your driving record or conduct a health test. Financial decision making gets much easier today with the help of financial tools like FriendlyScore which performs extensive analysis of social networking tendencies of borrowers that help lenders ascertain the credit-worthiness of borrowers.