How technology is changing the financial services we use every day

The financial services industry is undergoing a radical transformation driven by new technologies. These innovations are shaping the future of digital financial services, offering new opportunities to improve customer experience and enhance security.

Below is a summary of the main technologies that are driving this trend:

Mobile-First Experiences

The biggest transformation in the industry has been to bring all core services to mobile devices. Financial services firms are exploring how mobile apps can substitute or eventually replace in-person services. To achieve this, advanced networks, cloud computing, artificial intelligence, and strong data management are essential. In addition, adopting cybersecurity measures is crucial to protect both firms and their customers. “Mobile experiences are transforming the financial industry, allowing core services to be delivered digitally and improving customer engagement. However, this trend also increases the risk of cyber threats, making it crucial to adopt a reliable cybersecurity and resilience architecture,” he said. Mariano Ragognetti, CEO of Kyndryl in Argentina, Chile and Uruguay.

Biometrics and Adaptive Security

Thanks to advances in biometrics, it is now possible to establish stricter controls to prevent fraud. For example, large transactions may require authentication with facial recognition or fingerprints and other complementary security measures according to different pre-established levels and types. These and other cybersecurity technologies will be essential to protect the data and reputation of institutions in an increasingly demanding and complex regulatory environment.

Blockchain

Blockchain technology has the potential to facilitate digital payment methods and support new asset classes, bridging the gap between traditional and new financial infrastructures. While it presents challenges such as integration with traditional banking systems, blockchain promises a safer and more regulated financial environment. “Blockchain can bridge the gap between traditional and new financial infrastructure, offering a safer and more regulated environment. This technology has the potential to enable financial institutions to generate more revenue and profits, while consumers could manage and control their finances in one place,” added Ragognetti.

Open APIs

Open APIs allow financial services to integrate with other industries. This has given rise to new business models, where non-traditional companies collaborate with banks to offer innovative financial services. Security and regulation will be key to ensuring the safe use of the new open API ecosystem.

Big Data, AI and Machine Learning

These technologies help financial institutions better understand their customers’ behavior and detect fraudulent activity. Their effective adoption can accelerate the path to achieving hyper-personalized experiences at scale. By combining big data and artificial intelligence with other technologies, companies can innovate faster, improve the quality of their services, and achieve new efficiencies.

Quantum Computing in Digital Financial Services

Quantum computing offers much greater processing power than traditional computers, allowing complex problems to be solved more efficiently. This can improve regulatory compliance, innovation and the development of new products in the financial industry.

The evolution of financial services is driven by the convergence of these technologies. Organizations that prioritize digital modernization and security will be better positioned to grow and improve their customer experiences.

ESG

ESG technology is key for the banking sector, facilitating regulatory compliance, transparency and sustainable growth. Current trends show an integration of technology into ESG strategies, a growing market for sustainable finance and centralised management of ESG data. The main challenges are the complexity and cost of ESG data, the choice between in-house or external solutions and adapting to new regulations. ESG technology can improve financial performance and customer loyalty, and will be decisive for the future of banking.