The world of financial technology has rapidly changed over the past few years, and it's not slowing down. In fact, it's only accelerating as we enter the second half of 2023. From VR banking and biometric authentication to machine learning, we share the latest financial technology trends you need to know about, as well as how they’re changing the financial sector as it once existed.
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Virtual Reality Banking is Growing
Virtual reality (VR) is a computer-simulated environment that allows users to interact with and experience virtual features or items. You’ve probably heard of VR in relation to the gaming world, but recently the technology has become embedded into the financial sector at a rapid rate.
The largest bank in the United States, JPMorgan, joined the metaverse just last year, allowing customers to explore its range of Ethereum-based services. Only a few months before this venture, Bank of America launched a virtual reality training program for their employees across almost 4,300 branches.
Virtual reality technology has the potential to revolutionise banking by allowing customers to conduct transactions in an immersive environment, giving them a true sense of being there without having to travel or visit any physical location.
The benefits of virtual reality within the financial world are numerous, including cost savings and increased efficiency. In addition, virtual reality can also improve customer satisfaction by providing a more immersive experience than online banking can offer. This can result in increased loyalty and opportunities for financial institutions to offer a greater range of products or services.
Digital Wallets Continue to Dominate
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A digital wallet is a type of financial technology that allows you to store and use various forms of payment in one place. They’re typically accessible from your mobile phone or computer, and have been used for online shopping, online banking, and other online transactions for numerous years now.
Digital wallets can be used for a variety of purposes and are often integrated into other types of financial technology. For example, you might use your digital wallet to store loyalty points or gift cards. You might also use it to pay for goods and services directly from your bank account or credit card without using cash or debit cards.
With the rise of cryptocurrency and other digital assets, however, comes an increased reliance on this technology. In the current technological and financial environment, efforts are being made to provide even more secure ways to digitally pay and store this important financial information.
Digital Currencies are Entering into Mainstream Use
Speaking of cryptocurrency, the usage of digital currencies continues to be on the rise in 2023. As the world becomes more connected, people are using them in place of traditional money, and businesses are accepting them as payment for goods and services.
Digital currencies have become so common that they are now used as an investment vehicle by investors who want to diversify their portfolios with low-risk assets that can provide a high rate of return over time.
The most popular digital currencies are Bitcoin, Ethereum, and Litecoin. While each of these currencies is different, they all have one thing in common: they can be used as a medium for exchange.
Biometric Authentication is Becoming Commonplace
Biometric authentication is the latest technological process of verifying a person's identity by analysing their physical characteristics. A biometric system will typically use one or more of the following types of biometrics: fingerprint scanning, facial recognition, iris scanning, and voice recognition.
In 2023, biometric authentication will be even more widely adopted than it already is today, especially for banking and finance applications. Biometrics are growing rapidly due to their high accuracy rate and ease-of-use, particularly when it comes to security, privacy, and convenience. It is even faster and easier to implement than traditional passwords or PINs, and allows financial institutions, as well as their customers, to gain total peace of mind in relation to accessing their information or funds.
The Internet of Things (IoT) is Increasingly Being Used as an Innovative Tool
The Internet of Things (IoT) is essentially a network of physical devices that are connected to the internet and can communicate with one another. It’s not just your smart phone; it also includes vehicles, homes, appliances, and more.
The use of IoT in banking has grown exponentially since its inception just one decade ago. Banks and financial institutions are now using the technology to allow customers to do things like open a new account and transfer funds without having to visit a branch or call customer service. Banks have automated the process of opening new accounts through smart devices such as smartphones or tablets in order to reduce processing time while improving accuracy by eliminating human error.
Artificial intelligence (AI) and Machine Learning Continue to Rise
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We’ve already covered how you can use Artificial Intelligence in a finance role, but did you know AI-powered solutions are also being heavily used by financial institutions to monitor transactions for suspicious activity in 2023 and beyond?
In addition to monitoring credit card transactions for suspicious activity, AI-powered solutions can also be used by businesses to detect fraud. For example, if someone steals a credit card and tries to make unauthorised purchases with it, the system will pick up on the activity and alert the owner so they can stop any additional charges before they occur.
Machine learning, on the other hand, is a type of artificial intelligence that allows computers to learn without being explicitly programmed. Machine learning algorithms are trained using historical data; they learn how to spot patterns in the past that can be applied to future situations.
One of the main ways machine learning can be used in finance is to identify patterns and predict outcomes. For example, if an organisation wants to know whether a customer is likely to default on their loan, they might use machine learning algorithms to review past data and determine what factors are most closely associated with defaulting on loans. This can help them make better decisions going forward.
Machine learning is already being used in the financial industry to automate tasks, improve efficiency and productivity, and make better decisions, and is set to get even bigger in the coming years.
Decentralised Finance (DeFi) is the Future of Finance
The Decentralised Finance (DeFi) movement is a new way of thinking about finance that promises to change the way we transact with each other. At its core, DeFi refers to any financial system that uses blockchain technology and smart contracts to provide users with more control over their money.
While there are many different types of DeFi platforms currently being developed, they all have one thing in common: they allow users to access funds without going through an intermediary like a bank or credit card company – and without paying fees for doing so.
Final Thoughts
As technology continues to evolve, it seems clear that we will see many more advancements in the financial sector. The future of financial technology looks very promising, and we can expect more innovations in the next decade than ever before.
