Tehran(Bazaar):Luigi Wewege , Senior Vice President of Caye International Bank , FinTech School Instructor, Author of The Digital Banking Revolution in interview with Bazaar News Agency said: in 2022 there is a huge expectation to see smaller institutions providing and perfecting currently existing technology in order to keep up and compete with the larger financial institutions.
Following is the full text of the interview:
Bazaar: What is FinTech?
Wewege: Fintech is exactly what it sounds like: Technology for the financial sector. Fintech can mean the new technologies that major banks and lenders are using, but it can also mean the new forms of technology that startups are creating.
In decades past, there were only a handful of ways that a person could handle any financial transaction. You needed to go to a bank, fill out an application, and wait to see if your loan was approved. Whether you wanted a new credit card or a small business loan, the process was largely the same. Even with the addition of the Internet and banking websites, the process followed the same basic steps.
With fintech, there is tremendous disruption to this process. If individuals can't qualify for a traditional loan in their own community, offshore or international options might be considered. They could also head online to find investors for seed capital using an app designed for that specific purpose.
There are also small-money lenders and repayment apps that are never associated with a bank at all. With cryptocurrencies and blockchain technology on the rise, more and more of these transactions are open to the public and completely transparent.
Bazaar:What are the emerging technologies in FinTech?
Wewege: Whether you're an investment expert or someone just beginning to research new financial options, chances are you've probably heard of fintech. Short for financial technology, fintech is a term that is generating serious buzz.
This new, innovative financial technology can impact your investment choices and your financial future. It’s important to understand fintech as you diversify your assets and look to alternative choices to traditional financial services.
There are a number of emerging technologies in Fintech, and I consider these five being the ones to watch:
Artificial intelligence (AI) and robotics
The new trend right now is automation and, so far, it’s been mostly used in customer service applications. Now it’s going to be used even more to include investments, compliance, risk management, analytics, basic accounting, mortgage lending, loan and credit card processing, logistics plus supply chain management. Customers can now expect faster and more accurate services tailored to their needs.
Better chat bots
More financial service institutions are deploying chat bots and artificial intelligence to improve customer experience and automate processes. While freeing up humans to provide better and more personalized services, the chat bots interact with customers in real time to give them the information that they need when they need it, leaving them with high customer satisfaction.
People can expect to see many improvements in the way chat bots work as artificial intelligence is making it easier for them to act more like humans. Chat bots will most likely be more able to improve their understanding of conversational language (slang) and improve upon their grammatical errors.
Improvements should also be seen in the way services will be provided, based on information gathered through conversations between chat bots and customers.
Voice recognition
AI has helped to improve voice recognition, the ability of a software algorithm to match the identity of a person to his voice. Banks have been testing voice recognition for a number of years and have been perfecting it. In 2022 voice recognition will probably be used a lot in customer service as smart home devices increase the demand for, and the use of, hands-free banking and voice search.
Instead of having to remember passwords or having to give all their credentials on the phone, customers can be verified through their voices when they call the bank to make payments or to transfer money or to report a lost card.
There is a possibility that institutions that focus on voice recognition will become more popular as customers adopt the technology due to its convenience.
Software-as-a-service cloud services
Financial institutions are already using cloud services for human resources, customer relationship management (CRM) platforms and data storage. There is now a move, in 2021 and beyond, towards using the services for cross-border data exchanges, billings, payments, and loan management for faster and smoother services.
Better online banking systems
The great majority of banking customers prefer online banking to standing in the queue at the bank. Therefore, banks will most likely provide several ways of accessing their banking platform online. Some customers also prefer blockchain-based sharing economies so many banks will have to adopt the technology to improve online identity management, speed up cross-border payments, and to process commercial transactions faster.
Bazaar: What strategies are involved in promoting financial services technology in countries?
Wewege:In the last 10 years, there has been swift growth in the fintech industry (the industry that creates programs and technologies that support banking and financial services companies). The technology has been fully adopted by financial services in the past several years and it is now integrated within most financial institutions’ operations.
Fintech can basically be found in every sector including data management, administration, and customer experience. Large banks around the world have welcomed and adopted fintech and have even begun to lead the transformation and setting standards for new financial service organizations to follow.
Therefore, in 2022 there is a huge expectation to see smaller institutions providing and perfecting currently existing technology in order to keep up and compete with the larger financial institutions.
Bazaar: How do you think startups can play a more effective role in this field?
Wewege: The swift evolution of fintech has forced traditional financial institutions like banks, insurers, and asset management companies to face a new reality.Products, services, and business models that have worked for decades are no longer an option in the digital world. Legacy infrastructure must be replaced or augmented by newer, more efficient technologies.
To thrive, organizations recognize that they need to reinvent what they do and how they do it. Competitors are evolving too, and it’s not just FinTech’s knocking on the market door - large tech giants, retailers and other global companies are looking for ways to provide the financial services customers want.
How startups can play a more effective role is by focusing on niche areas of financial technology helping smaller players take on larger firms with nimbler cost-effective digital systems.
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