By Nosagieragbon Ezomo

The provision of financial services had been evolving through the course of history having been reshaped by major technological advancements and changes in customer expectations. The advances of technology in the financial services industry have been major, which has championed fundamental changes to organisational effectiveness, superior customer experience, and the development of a new array of products and services.

Between the 1980s and 1990s, which saw the introduction of online banking, became a pivotal moment in the transformation; players offered customers the ability to perform various banking activities over an Internet connection, reducing their reliance on physical bank branches. We are now in the age of open banking, APIs, and new interconnections; technology companies and Fintech companies now amongst the organisations providing financial services. These technical concepts signify a business revolution in Digital Banking Systems.

They will enable bankers to form partnerships and create new services with new players, leading to the generation of new sources of revenue. the financial services industry has been undergoing a major shift by the introduction and adoption of disruptive technologies. This metamorphosis alters the way businesses and customers behave towards going about those day-to-day activities. They replace principles and orderliness by which financial institutions operate because they adapt  their interactions with customers and modify their internal policies and framework. From artificial intelligence to chatbots and digital payment solutions, the financial services topography is rapidly embracing this divergence from the early systems used to proffer services. 

The emergence of Artificial intelligence (AI) in the financial services sector is making an indelible mark and has become a game changer; using AI-powered algorithms to examine vast amounts of data, determine patterns and action real-time decisions. Banks have introduced autonomous chatbots available 24/7 without human intervention like Leo(UBA), Ziva(Zenith Bank), Cora(NatWest Bank), Abby(Absa Bank) and Erica(Bank of America) in the c customer service space, as well as having chatbots in the fraud detection, personalised finance services, reconciliation and credit scoring, reducing if not eliminating repetitive and laborious tasks. The usefulness of AI had extended to perform predictive analysis, helping financial institutions to compute trend analysis and customer demographics.

Blockchain a revolutionary innovation, with its unique features, offers decentralized and distributed ledgers that record transactions across multiple systems globally, making it difficult for established records to be altered. There is vast potential for this technology ranging from cryptocurrency applications to supply chain management and smart contract usage. However, governments around the world are giving consideration to new regulations which can help guide as well as govern cryptocurrencies usage.

With Mobile banking, customer can conduct transactions and manage their finances using their mobile devices, making mobile banking an integral part of the banking experience. Apple Pay, Google Pay, and Mpesa are part of transformative solutions in the financial services industry which form Digital payment solutions, offering mobile wallets and peer-to-peer payments; allowing customers to make in-store transactions without having to carry cash or physical debit/credit cards making payments consistent, comfortable, and uninterrupted.

Industry leaders have often spoken on how digital payments has become inevitable for our daily consumer activities thus expanding the frontiers of how we transact. Society has bought into this rejigged approach in the several forms, one of which is money transfer, purchase of goods and services, and manage their finances. Traditional banking services have been seeing the rise of digital payment platforms and, confronted to adapt to the changing technology to meet the customers’ needs. 

From my experience of using a robo-advisor, it was obvious that the disruption knows no bounds; it is transforming the wealth management sector. Trading platforms and investment platforms use algorithms to create and manage investment portfolios at a lower cost rate when compared to human advisors. These robo-advisors are being explored by a crop of new-generation investors comfortable with using the technology in combination with AI to oversee their investments. Overall, the history of banking transformation reflects a continuous evolution driven by technological innovation, changing consumer behaviour, and the pursuit of operational excellence in the financial industry.

In summary, the disruption brought about by such technologies is creating remarkable changes within the financial services industry. By embracing these technologies, financial institutions will need to redesign their business models, internal processes, and improve their customer experiences to maintain competitive advantage in the ever-adjusting panorama. In Addition, regulators will need to maintain the same momentum of implementing advanced technology solutions to guarantee consumer protection and preserve financial stability. As the adoption of disruptive technology continues, in the different sectors and industries, a full perspective of the opportunities and challenges will continue to evolve.

Nosagieragbon Ezomo wrote from Edinburgh, Scotland