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“Please wait while your transaction is processing” – This, among others, is a familiar phase when performing transactions using an Automated Teller Machine (ATM) which is a technology-driven alternative for cash withdrawals and deposits. These and more have shaped the financial ecosystem in recent times, making financial transactions seamless and efficient, to say the least.

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In less than a decade ago, it would not have been possible to withdraw cash from anywhere, make digital payments, pay for goods directly from a mobile device or track transactions or packages. These are available at our fingertips today as Mama Iyabo who sells fish in the market can get paid for her fish directly to her bank account, Ebuka on the other hand can order and pay for goods from China with just a couple of clicks on a mobile application just as Segun can send money all the way from the UK to his grandmother in a village somewhere in Africa. The evolution of technology and Fintech is the reason for all these.

Fintech is short for financial technology are technology-driven services and applications that utilize innovation, data access, progressive analysis and trends to change the financial ecosystem. They are majorly concerned with payment infrastructure, access to financial services, employing emerging technologies to achieve a common goal of a super effective, secured and efficient financial system.

As the day goes by, a new method of doing things surfaces, especially one which is tech-driven. Some of these emerging technologies to Fintech that has and are still shaping the financial industry include mobile banking, Blockchain, Artificial intelligence etc. Their application has no doubt taken financial processes up a notch when compared to the recent past. Each with its unique feature, advantage and importance, solving an existing problem effectively.

Mobile banking is one of the most popular innovations of Fintech. Banks have mobile applications that can do almost virtually everything a physical bank can do. With the number of smartphone users growing exponentially, these user-friendly mobile apps have made banking as a whole seem seamless even to a layman. This technology has grown to the extent that some banks and financial institutions have one or no physical branch yet operate effectively via mobile banking apps.

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Blockchain is another emerging technology to Fintech synonymous with cryptocurrency. Blockchain technology gives a secure, transparent, stable and dependable ledger for records. With this, transactions are encrypted, making them difficult to be tampered with before getting to the end-user. Blockchain technology has made inter/intra-bank transactions quicker than ever.

Artificial intelligence and Biometrics are top tiers, they can be said to be the most important emerging technology to Fintech. AI proffers quality solutions as well as aids decision-making. Chatbots controlled by AI serve as a great customer service tool, providing answers to customers’ questions and enquires in real-time. Fingerprint, retina, face and voice are employed in biometrics to provide a trusted form of safety and security to safeguard customers as well as reduce cybercrime.

RegTech (Regulatory Technology) is also another essential element in Fintech architecture. RegTech is used to monitor, report and comply with regulatory requirements. Institutions and firms applying this technology have little or nothing to worry about when it comes to regulatory requirements, as the system controls the entire process in an automated manner. This technology in combination with cloud computing and artificial intelligence helps to increase transparency, which in itself is a critical attribute of a good business entity.

Finally, cloud computing cannot be overlooked, as it is the basis of every other technology or innovation available today. Financial institutions work with large amounts of data of various forms, some with sensitive information. Cloud computing provides a flexible storage service to gather these data in such a manner that it can be accessed anywhere and anytime at a lower cost when compared to other conventional means.

Without a doubt, the importance of emerging technologies to Fintech is too enormous to mention, but they can be seen and felt in our daily routines and activities doing what technology was created to do; making life easier, faster and more convenient for mankind.

Featured Image Source: Finance Monthly
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This article was first published on 22nd March 2022

chidiogo-akaelu

Chidiogo Shalom Akaelu holds a degree in English and Literary Studies, from the University of Nigeria. She is a freelance writer, editor and founder of Loana Press, a budding online publishing outlet.

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