The following is a Guest Post by Annie Button
The business model of finance organizations has stayed fairly static for many years – even decades. In an industry that has been extremely profitable for so long, there really was no reason to fix what wasn’t broken.
However, this has all changed in recent years with the industry finding itself surrounded by emerging disruptive technologies such as cryptocurrencies, crowdfunding, peer-to-peer lending and mobile payments.
Of course, the financial industry can be highly resilient in the face of new technologies – the short-lived success of DigiCash through the 1990s is a great example of something that looked like it would change the finance industry forever, but ended up going nowhere.
Nevertheless, finance businesses need to be aware of technological changes that can fundamentally change the industry. To examine this, we take a look at the technologies that all finance businesses need to consider investing in.
The benefits of cloud-based systems to financial businesses are obvious. And this was certainly something that caught on quickly. However, despite fast early uptake, it seems that – with the finance industry at least – old habits die hard.
According to a whitepaper commissioned by Canonical – around 70% of finance businesses that have invested in cloud computing technology are only at the initial stage of development, trial and testing with their cloud systems. This puts the industry way behind the average in terms of cloud deployment.
Finance businesses, perhaps more than any others, need to really be at the forefront of cybersecurity. This is because finance companies make such an obvious and lucrative target for cybercriminals. Gone are the days that businesses could rely on a strong firewall and an antivirus system – and for finance businesses, it is essential to have highly advanced and comprehensive protection.
There are various types of protection that businesses could look to invest in – ranging from endpoint detection and response, which focuses on the ‘endpoints’ such as computers, tablets and other devices, to security information and events management (SIEM) software, which tracks data and events across a business’ network as a whole.
It can also be smart to look into ethical hacking, with services such as penetration testing. This is a type of assessment where cybersecurity professionals attempt to uncover vulnerabilities and weaknesses in the system.
Personal data has been used successfully by many large businesses across a wide variety of sectors. Big names like Google, Amazon, and Facebook have been especially adept at incorporating artificial intelligence into their systems to make more from this extremely valuable data.
In that regard, finance businesses are significantly lagging behind. A report revealed that under one-third of financial institutions were utilizing artificial intelligence technologies, despite a much higher proportion understanding the potential advantages.
Those finance businesses that are willing to be trailblazers in the industry by making AI an important part of their use of data can see significant benefits.
Process automation is a hot topic across businesses in all sectors – not just finance. However, it is clear to see that this is something that can have really powerful implications in the sector.
The fundamental idea behind process automation is taking simple repetitive tasks out of the hands of humans, and having them performed by software. This can actually be hugely helpful as it removes dull, manual work from individuals and allows machines to take care of it. This saves employees time and frees them up to do other work.
Finance businesses that deal with a significant number of invoices that need to be processed and other menial tasks can have these accomplished easily with process automation. The time that it would have taken staff to do this work is saved, and they are then free to pursue more business-critical work.
Often thought of only in relation to cryptocurrencies, blockchain has the potential to be extremely valuable to finance businesses. Through record blocks and adding them to the chain, businesses can have a shared digital ledger that provides permanent information on transaction data.
It is highly encrypted, so it cannot be attacked by hackers, and due to the nature of the blockchain, it cannot be tampered with at a later date.