The world of finance has changed. Consumers are becoming much more demanding and financial institutions are having to turn services through the use of advanced technologies. With the emergence of numerous start-ups threatening key players with innovative approaches to the market, the scenario is becoming more and more complex to govern. The only clear element in support of these changes is the “application”.
In fact, the financial sector is destined to be transformed by the evolution of applications, both from the point of view of working methods to achieve greater efficiency and on the part of consumers who want to understand and manage their finances better.
F5 Networks has recently produced a report titled “The Future of App” conducted by Foresight Factory, which reveals some fascinating insights on key trends that will have a significant impact on society over the next decade. In the financial field, the results highlight in particular the ever-expanding use of the blockchain.
The affirmation of cognitive finance
Consumers are increasingly interested in personalized and predictive services when it comes to finance. This is especially true for young people, just think that in Italy, 6 out of 10 Y-generation consumers are said to be interested in a service that can predict their future financial situation based on current factors such as professional performance and spending .
Within a number of areas of financial services, great attention is paid to cognitive apps or more generally to cognitive computing, especially for their ability to handle the complex challenges that are emerging in the digital economy.
Several financial institutes are considering how to use AI to prevent fraud, acting against security attacks before they happen, but I believe that the goal in the medium term will help people make better decisions, while it will take 10 more years because the AI and machine learning are definitely affirmed.
Jana Eggers, CEO of Nara Logics, a technology company specializing in synaptic intelligence, said: “For me, the next step will be to improve the way people work … the computer has a huge computing power that can give you many more options and man can do a better job by choosing between these options. Much of what we do is actually the calculation; much is decision and reasoning – and computers are not at this level yet. “
Blockchains and new networks
In a time of widespread uncertainty and distrust that pervades our society, the promise of the blockchain of new ultra-safe measures for security and authenticity, without a costly intermediary, is an incredibly convincing proposition. For many experts, blockchain is the largest disruptor for the digital economy.
To date, blockchain is best known as Bitcoin technology and so far most likely to be the most widely used in financial services.
However, evolutions in underlying technology to increase privacy are expanding the range of use cases. One of the many emerging concepts is dApp (ie decentralized applications) with smart contracts that facilitate the exchange of money, content, property, actions, or anything with value through digital currency, allowing, for example, donors to finance businesses in Kenya.
This is the case for 4G Capital, which provides instant access to credit for the growth of small businesses in Africa. The loan will be converted and distributed to companies using the 4G Capital transition system.
Another example is OpenBazaar, which aims to be a decentralized version of eBay. Sellers download and install on their computer a program that connects them directly with other people trying to buy and sell goods and services. Bitcoins are used as a currency for transitions between vendors and buyers.
DApp responds to the growing demand for peer-to-peer consumer solutions, and their dissemination is supported by a combination of mistrust in institutions and a desire to gain greater value.
From Europe to South Africa, almost a third of consumers (32%) used or would be interested in using a peer-to-peer loan site, a percentage that reaches 38% if we refer to the Y generation in our country.
This certainly does not mean that more traditional approaches to transactions, proof of authenticity and cyber security will not be a significant feature of the digital economy. The blockchain continues to have a number of limitations. Analysis from the Open Data Institute (ODI) has highlighted a number of potential obstacles, including interoperability, privacy and the need to find information within the blockchain.
However, as awareness and understanding of technology are growing, consumers will have more control over data and financial institutions will have to be prepared to handle the potential impact of new market players and the evolution of service expectations which can be offered.
Respond to market changes
It is evident that the digital economy is growing pressure on companies and developers to continue to play a prominent role. Consumer needs change ever more rapidly and security concerns are growing steadily. The Future of App report indicates that enormous opportunities are emerging for those companies that will be able to provide applications with speed, adaptive features and security.
Financial industry companies are just beginning to exploit the benefits of applications but are still worried about the security implications that these changes imply.
However, it is essential that they continue to evaluate the emergence of new technologies in this area and develop appropriate strategies, involving DevOps, IT, security and business teams.
In the future, access to an ever-increasing amount of personal data coupled with the ability to process and direct that information locally will create new opportunities for consumers who will become themselves “guardians of their data.”
The need for greater transparency, combined with the blockchain-based business model, will bring more and more customers to require financial institutions to safeguard data and improve overall application security standards to retain consumer confidence.