Phinance technologies are those that help business organizations to expand their customer base. These technologies decrease the costs associated with acquiring new customers and improve operational efficiency.
These solutions are readily available for financial institutions of all sizes, from large banks to tiny credit unions. They are reshaping back-office functions, product delivery, risk management, and marketing.
Artificial Intelligence (AI)
AI applications help organisations gain valuable consumer insights, develop consumer personas and increase client demand. The technology also improves digital marketing by reducing expenses and eliminating the need for mind-numbing advertising that irritates customers.
AI software sifts through billions of internet data points to quickly provide marketing teams with essential information such as what price will drive conversions, when to post on social media, etc. It can even make strategic decisions such as identifying potential clients and determining a budget.
AI can track real-time tactical data and make quick decisions based on campaign and customer context, freeing up the team to focus on important projects. It also speeds up data processing and reduces errors.
Machine Learning (ML)
Machine learning is a subset of AI that allows software applications to automatically improve their performance without being explicitly programmed. It works by using historical data as input to predict new output values, resulting in improved accuracy over time. It is often used for recommendation engines, spam filtering, malware threat detection and business process automation.
Finance leaders are facing an increasing number of pressures when executing M&A deals. They must minimize one-time costs, accelerate value capture, ensure visibility and control and position their organizations to close quickly. To meet these goals, they need agile financial applications that can adapt to changing business conditions.
Internet of Things (IoT)
The Internet of Things (IoT) refers to the network of devices, machines, buildings, animals or objects that have been assigned unique identifiers and can communicate over the Internet without requiring human-to-human or computer-to-computer interaction. This can include everything from a person wearing a heart monitor to an automobile with built-in sensors that notify the driver when tire pressure is low.
IoT applications are used in a wide range of industries. For example, transportation and logistics systems can be optimised using IoT sensor data, such as tracking and monitoring temperatures on trucks, ships or trains that carry perishable inventory. This allows for more efficient routing and delivery of products to customers.
Big Data
Big Data is an umbrella term for a collection of huge volumes of information requiring advanced analytics to make sense of it. It has applications in industries such as retail, entertainment and health care.
For example, Amazon and Spotify use behavioral analytics to recommend products based on customers’ preferences. It is also used by banks to identify patterns of fraud and streamline operations.
The finance industry uses big data to enhance research and provide services such as robo-advisors, credit scoring, investment apps, brokerage services, and blockchain technology. It can also help reduce operational costs by automating manual processes such as accounts payable. It can also improve customer service through personalized communication and more targeted marketing.
Data Analytics
Data analytics is the process of structuring massive amounts of irregular data into useful required information by using statistical tools. Its applications range from banking and credit card companies analyzing withdrawal and spending patterns to prevent fraud and identity theft to mobile network operators analyzing customer churn.
These technology trends hold the promise of transforming traditional financial services business models and economics to benefit marginalized communities. New entrants such as MNOs, payments service providers, merchant aggregators, retailers, FinTech companies, and neo-banks are leveraging these technologies to lower barriers to entry and change competitive landscapes.
These trends also include advanced security and privacy protections such as federated learning, which reduces the risk to privacy by using only necessary and sanitized data for training ML algorithms.
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