Switzerland has become a tech leader in Europe due to its research and development and the nation is currently ranked in third place in the world’s index of most innovative countries. Fintech has become a key player in driving growth and opportunities, particularly in the financial services and banking industries. Ever since the financial crisis shook the economy in 2008, the conditions of the industry have radically changed and technology has paved the way for disruptors. The global fintech industry is worth tens of billions of dollars – and it continues to grow and re-shape finance. So, what are the benefits of fintech innovations that have led to a new generation of digital banks?
Efficiency and convenience
One of the greatest advantages of fintech innovation in finance is the enhanced speed. As a result of technological advancements, payment processes have become much more efficient. Fintech – an overarching term for all financial technologies – facilitates various payment systems, which in turn, creates more accurate and transparent transactions. For years, organisations relied on traditional banks for the management of their finances, but now fintech has transformed the customer experience. For example, fintech paved the way for mobile payments, which provides greater convenience and flexibility.
There’s no doubt that security is vital to the operation and success of a business. In financial services, the obvious reason for good security measures is to protect customers’ assets and personal information, such as phone numbers, birth dates and email addresses. Poor security management leaves financial institutions vulnerable to cyber-attacks, fraud and other potential threats – so finance companies need to ensure data security is at the forefront of their businesses. That’s why fintech innovations can be hugely beneficial for finance in regard to security and compliance.
There’s a range of security innovations that are shaping the finance industry. For example, Advanced Encryption Standard (AES) is one of the most powerful and widely used encryption algorithms for securing data transmitted through digital files. Biometric data and tokenization are also among some of the most commonly used fintech security systems. As a result of fintech, financial institutions and banks are able to provide customers with the most advanced monetary services, creating a much more transparent and safer environment.
Financial technology has paved the way for the rise of challenger banks – which are much smaller than traditional banks and are mostly accessed exclusively online. Challenger banks, like Swiss company Neon offer customers a much more streamlined service with lower fees and they can often be managed much more efficiently, as customers can open an account in a matter of minutes. Challenger banks and the associated technology has redefined the finance industry and provided customers with more options for banking. Many challengers also use cloud technology to ensure unlimited power and storage, which is fast becoming a standard for any digital bank.
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