Technology is touching all of our lives, whether we like it or not. It is infiltrating everything we do – making things easier, automated, more efficient, and even lower cost. But one of the industries it’s impacting the most is that of finance. In just a few short years, the financial sector has become almost unrecognizable due to the technology that is underpinning it. From forex to AI and everything in between, let’s find out more.
Blockchain – the technology that underpins cryptocurrencies such as bitcoin and litecoin – was once eyed with suspicion. Those that were not in the know, tarred it with the same brush of cynicism that they used for cryptocurrency, but now, they are realizing their mistake. Blockchain technology has been realized as a system that can have vast and far-reaching possibilities for an increasing number of sectors. Logistics, healthcare, education, manufacturing, government, and legal processes have all adopted blockchain into their operations.
But it’s inn finance where it really comes into its own. The fact that the blockchain is immutable, decentralized, and secure means that it’s of huge interest to the financial services industry. Most of the big banks, lenders, insurers, and investment banks have incorporated some form of blockchain, or are planning to, into their business model. It’s particularly useful in recording deposits and payments as once a transaction is recorded on the blockchain, it cannot be altered or edited in either way. It also has potential due to the fact transactions can be conducted cross-border in a matter of seconds, at a lower cost than with fiat currency.
When Bitcoin launched over a decade ago, many were cynical of its use. As it became more popular, still many were skeptical that it could be a viable alternative to fiat currency. But in 2020, cryptocurrency in various forms; stablecoins, altcoins, virtual assets and digital currencies have flourished. You can pay for groceries, buy a house, get your salary paid, and even gamble in cryptocurrency.
Some service providers have their own coins, others integrate payment with other leading coins into their payment options. As we proceed into 2021, we can anticipate that more institutions and companies will start using and accepting cryptocurrencies. Big names such as Facebook, JPMorgan Chase, Walmart, AirAsia, Amazon and Tencent have either launched their own coin or are set to do so shortly. In particular, financial institutions have found value in launching their own coins to streamline transactions and transfers of cash and other assets.
Online trading has grown exponentially during the last year – as much as 300% according to some sources. This huge influx of new customers are looking to buy, sell, and trade various currencies and to capitalize on volatile market conditions. The majority of these customers are first time traders and are using mobile devices. Thanks to advances in mobile technology, notably speed, screen quality and refresh times, the advancement of apps, and increased internet speeds, trading online has become as easy as it was previously on a mobile.
A popular way for many of these newbies to get started is to utilize platforms that provide forex demo trading accounts. These types of accounts allow traders to experiment with different strategies and methods to maximize their success. This is particularly beneficial and valuable to those who aren’t sure how the markets work and want to learn through trial and error. The ability to have access to these accounts via mobile, wherever they are and whenever they want to practice buying and selling currencies of their choice. We can expect to see a big increase in mobile trading in the future as people move away from laptops and PCs.
It doesn’t seem so long ago that artificial intelligence was something only seen in Sci-fi and games. But here we are in 2020, and many of us are interacting with AI every day, without even knowing it. Our mobiles have inbuilt AI assistants as do our home assistants and PCs. We talk to AI chatbots on social media and company websites, sometimes even by email. What’s more is AI is often at work behind the scenes, learning, watching, and absorbing what we do and say.
In Finance, it’s being used on the front line to improve and streamline customer service, as well as to gather information on clients’ behavior and needs. AI is also being utilized to assess and predict loan risks, to process applications, onboarding, and account opening, and to analyze accounts, spending habits, and overall financial health. The technology of AI has the power to do this in seconds and automatically, eliminating any human error. Humans, unfortunately, are slower and are at risk of bias, mistakes, and emotional decisions. AI is not set to replace humans in the financial services workforce, but rather improve the way the system works.
The way we do many things now would have been unthinkable a decade ago, it will be interesting to see what the ’20s will bring!