Question

Provide an example of how technological progress is improving banking.

Provide an example of how technological progress is hurting some banks.

Answer 1

1. Technology is changing the way companies work and in many industries supplying products to consumers. We have detectors that detect toxic substances in our water, medical equipment that can diagnose life-threatening conditions before they become a concern, and smarter computer software that makes it easier than ever to monitor vital equipment

Traditionally, banking has been something achieved in the non-virtual world. People would go to their bank in town to withdraw money, transfer money from one location to another, and work their finances out. You would talk to a helpful member of staff and interact in a brick and mortar building with people. Such premises, however, are rapidly becoming redundant. Online banking is becoming increasingly sophisticated on a daily basis–with just the push of a button, we can transfer money or pay for goods. We can toggle between banks and choose items for our needs using sites like finance.co.uk; the list is endless. We live in an age in which phones, computers and tablets can reach our bank accounts. This is the sort of thing that disrupts the banking sector and is one of the greatest impacts on industry and consumers.

2. Customer service may be the biggest way that FinTech disrupts the finance and banking sector. A good customer service team has been vital to any financial company in the past. Anything that involved handling money or financial issues required trained staff to help solve problems and provide people with assistance. Chatbots, however, have quickly become the norm for interacting with customers. An AI that evolves and becomes more intelligent is something that is good on paper, but theoretically it both lacks a human touch and also makes a lot of people out of demand. AI is moving beyond the capacity of the designers and is now beginning to detect and identify fraud. The computer is able to track the victim's history and then quantify and estimate the probability of fraud based on past trends. All of this can be done at a much faster speed than a human could, which means that a lot of fraud teams don't have to be as big as they are, but can be reduced to a small handful of people.

Ultimately, these are just a few of the various ways in which technology is changing the way the finance industry operates. Development is the main disturbance. Progress in any sector is typically a form of change, when existing individuals and technologies are made obsolete and need to be upgraded or removed. The financial industry's human element is really what's at stake here.