How Has Digitalization Transformed The Financial Services Sector?

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Hieu Tran

2022-11-11 09:46:36

gct solution digitalization transformed financial services

Technology is rapidly transforming and enhancing the market. The majority of industries have reaped the benefits of technological progress. One of these industries that has advanced significantly as a result of technological progress is finance. 


In this article, GCT Solution - a top IT outsourcing company in Vietnam, will give you some insights into the benefits of technology in financial services and how digitalization has transformed the financial services sector. 


1. What are the advantages of applying technology to the financial services sector?

A. Managing Data

Technology has greatly simplified the management of financial data by users. Data can be organized significantly better than in the past, and employees can rapidly access it when necessary. For instance, instead of visiting physical banks to check account balances, bank users can easily access bank apps on their smartphones to monitor account balances and execute other activities. Due to technological advancements, it is now easier for large firms to execute critical duties such as money management.


B. Automation

When it comes to organizing financial data, technology may eliminate a substantial amount of redundancy. Numerous tasks, such as checkbook balancing, can be easily automated using the appropriate technologies. Not only does automation facilitate the completion of these arduous activities, but it also expedites their completion. Organizing receipts for tax preparation, which used to take hours, days, or months, may now be accomplished rapidly using smartphone devices and their accompanying software.


C. Transactions

Technology has vastly improved the way in which people conduct transactions. A few decades ago, transactions were much different than they are now. Previously, most transactions required actual cash or checks. However, anyone may now transfer money remotely through smartphone applications. Cryptocurrencies are enormous technological advancements that have spawned totally new monetary and payment systems. Many of these developments, like cryptocurrencies, have made financial transactions more secure, removing the potential for money loss or physical theft. There are still hazards that have been presented, but as technology develops, so do these risks.


As technology continues to develop and expand, the financial services industry trends

will also continue to grow and expand. The financial industry has reaped numerous benefits from the advancements in technology. Technology has made financial transactions far more efficient and more rapid than in the past. Additionally, financial transactions are significantly more secure than they were in the past.




2. How has technology transformed the financial services sector?

A. Commercial banking services

As a result of the ever-increasing speed of the modern business world, company requirements are continually evolving, and traditional banking models are struggling to keep up.


Business executives are willing to abandon the convenience of established institutions in order to have access to the services that best meet their requirements. To remain competitive, banks must adapt to the changing needs of their customers. In order to enhance the client experience and extend service offerings, it is necessary to utilize the most recent information technology.


Accelerated payments are a developing monetary demand for entrepreneurs. They require rapid verification that funds have been placed and are accessible. The quicker money are received, the quicker it may be reinvested.


Using artificial intelligence can eliminate certain manual tasks. AI analyzes data to facilitate improved decision-making and more effective financial management for businesses.


Virtual, augmented, and mixed-reality technologies are gradually entering the banking industry. Extended reality-based solutions could, among other things, assist in bridging the gap between financial institution workers and their clients for a more immersive and enhanced experience.


B. E-commerce

Today, in the realm of computerized securities trading, transaction speed is a major determinant of profits and losses. Herein lies the significance of electronic trading and high-frequency trading (HFT). High-frequency trading use mathematical algorithms to conduct trades one thousand times faster than conventional methods.


This allows them to shorten their tick-to-trade time, which is the time between the signal signaling a market movement and the decision to buy or sell. This is a crucial step in offering a global perspective on system performance and infrastructure enhancement strategies.


Technology advancements make High-frequency trading increasingly accessible by providing ultra-fast and powerful devices that reduce latency. Financial technology innovation is utilized by electronic trading companies to minimize their operational expenses, reduce their error risk, and boost their efficiency and productivity.


C. Equity Investment Fund

The sophistication of financial goods is growing as a result of new technology. They are increasingly customized and suited to the specific customer requirements and associated investor profile.


The establishment of equity funds, for instance, drew new investors and democratized access to the stock market. These funds provide the general people an easy, inexpensive, secure, and diversified way to invest.


Technology has created new opportunities for stock market trading and personal money management. It enables the client, among other things, to examine real-time returns on investment, conduct secure payment transactions, and contact a consultant from anywhere, all without allowing open access to their financial portfolio.


D. Innovation and Insurance

In recent decades, technology has benefited the insurance sector, notably in the field of data management.

As time passes, technology and insurance will be increasingly linked. It is now normal practice to apply for insurance online and receive a quote promptly, with the knowledge that our personal information is secure. Consequently, it is straightforward to make modest modifications to your coverage via a self-service internet portal. In the case of property insurance, a claim can be filed at any moment, thereby initiating the evaluation procedure.


Thanks to customer data analytics, financial technologies also enable insurers to create contracts that are particularly tailored to each client's demands.




Final thoughts

These financial services industry trends are becoming more and more interconnected and integrated, providing a great boost to fintech and the financial sector. These advancements will accelerate transaction processing, improve customer service, and make financial data more accessible. Consequently, there will be an increase in the development and diffusion of applications and technologies that facilitate the engagement of individuals with growing financial services. On the other hand, restricting the expansion of technology development in our financial systems exposes us to an unaffordable security risk. Therefore, the financial sector's digital transformation will continue to be a strategic focus.


If you are seeking a seasoned IT provider, GCT Solution is the ideal choice. With 3 years of expertise, we specialize in Mobile App , Web App, System Development, Blockchain Development and Testing Services. Our 100+ skilled IT consultants and developers can handle projects of any size. Having successfully delivered over 50+ solutions to clients worldwide, we are dedicated to supporting your goals. Reach out to us for a detailed discussion, confident that GCT Solution is poised to meet all your IT needs with tailored, efficient solutions. 

Author: Chi Vo - Content Marketing Executive

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