Every industry has its own set of barriers and hurdles that need to be addressed. Whether it is the obstacles in international trade or the acceptance of technological solutions in the business. The financial sector is also subjected to a number of hurdles one of which is the technological advancements in their processes. Banks and financial institutions have mostly been reluctant to adopt modern technology to streamline their processes. However, they are fast coming around to the idea of advancing their IT programs in order to stay ahead of the competition and make their services more convenient for customers. Fintech has played an important role in helping them advance their IT structures breaking barriers in a number of ways.
Improving Trade Relations
Fintech companies have made it easier for banks to increase their efficiency. It is particularly helping smaller banks to implement low-cost solutions, without having to spend too much by hiring more people. Blockchain-based solutions and distributed ledgers are allowing banks to eliminate the need for physical authentications, all the while cutting their costs and improving their trade relations.
The Increase of Identity Solutions
Identity authentications solutions are paving the way for a more inclusive financial structure. Banks no longer require the physical presence of customers to authenticate their identities, as it can be performed remotely through digital document scanning and facial biometrics. Identity solutions are also allowing banks to provide their services to undocumented individuals, who do not have access to government authorities. Biometric authentications can enable financial institutes to detect fraud and, more importantly, help people find jobs, thus paving a way for undiscovered human potential.
Empowering Women through Fintech
Odd though it may sound, Fintech solutions are reducing barriers to entry in the financial sector. With the sort of opportunity present in the Fintech sector, women are increasingly coming into the fold and helping in the development of tech-based solutions for the financial services sector. More women are also increasingly choosing computer sciences and programming as a career in many developing countries in the Middle East.
The Fintech has also enabled banks and financial institutes to increase transparency in their practices. The EU has devised new rules for the sector to make their clients’ account details available to third-party firms. These firms can then use the information to provide better and improved services to customers. For instance, a LaaS (Lending as a Service) company can use the information acquired from different banks to provide the best possible options for credit available for an individual according to their needs. They would be able to provide accurate information and the lowest premium available to the borrower in a particular situation.
Other regulations require banks to keep digital records of client transactions and records in order to avoid oversight and make financial reporting easier. Furthermore, KYC and AML requirements set up by governments are also prompting banks to implement effective identity verification solutions in their framework to avoid fraud and other financial crimes like money laundering.