Page 181 - ICDEBI2018

International Journal of Trend in Scientific Research and Development (IJTSRD) ISSN: 2456-6470 | IF: 4.101

operate in developing markets to streamline and ease Implication of Fintech into banking- The
the financial services. disruption of financial services.
Here are some ways in which Fintech is changing the
Previously, Fintech was primarily used for back- game for the financial services industry:
office functions by leveraging software to help bank 1. Chabot’s for customer service – Chabot’s are
workforces handle accounts, execute transactions, bits of software that use natural language processing
maintain and record the customer databases, etc. and machine learning to uninterruptedly learn from
Today, however, Fintech has transformed how banks human interactions. This is becoming a popular tool
operate. No longer relegated to the gloomy corners of for banking industry to streamline customer-facing
back-offices, Fintech has taken centre stage by interactions such as handling queries or directing
making itself indispensable to customer-facing customers to relevant departments. Some Chabot’s
processes. Every digital transaction, be it online can even provide investment advice such as Erica, the
shopping, foreign currency exchange, stock Bank of America’s Chabot. Robots, such as the one
investments, or money transfers, is possible at our used by UBS, scan customer emails for trading
fingertips thanks to Fintech. instructions and execute these autonomously,
reducing the time taken from 45 minutes to two
Major Factors deriving the Fintech revolution minutes. The use of these Chabot’s not only improves
Mobility has had anenormousrole to play in the customer gratification and reduces costs but also frees
Fintech revolution. The perception agents in call centres to focus on value addition.
of smartphones provided the consumers an easier
way to interact with banks and gain real-time views 2. Machine learning and AI for fraud detection –
into their bank accounts. Unavoidably, as mobile apps Identifying fraudulent transactions is the main goal of
grew in sophistication, so did customer ultimatum for anti-money laundering departments. For most banks,
intuitive banking services. Today, digital this involves a combination of software and people.
transformation within banks united with flexibility has Security software generates alerts on the possibility of
transformed the very nature of banking. Customers no a fraudulent transaction or a virus attack. Then, it is
longer have to struggle with long queues, wait time up to human investigators to determine whether the
and postponement to conduct their day to day banking transaction or attack is a false positive or a real threat.
activities. With the increasing sophistication of attacks, this
time-consuming process can cost banks millions of
dollars, loss of data and customer confidence, and
negative brand reputation. According to McKinsey,
the adoption of data aggregation platforms, machine
learning-driven statistical modelling and process
automation can transform AML operations by
infusing new efficiencies. More importantly, machine
learning algorithms can leverage historical records to
The smartphone revolution soon gave an emergence determine patterns and predict the possibility of fraud
to another development – the explosion of online and attacks before they occur, reducing manual effort
payment apps that integrate with bank accounts, by nearly 50%.
allowing seamless online shopping, investments,
transfers, and mobile-to-mobile payments. Finally, the 3. Omni-channel banking and obsolescence of
rising number of online platforms and applications bank branches – As banking shifts from being a
fuelled the need for faster, smarter and more branch-specific activity to one that permeates all
robust security protocols to safeguard customer data. digital channels (mobile, social and online), the
As cyber-attacks such as ransom ware, malware and importance of having several brick-and-mortar bank
phishing become increasingly sophisticated, mere offices decreases. In fact, studies show that the
login IDs and passwords are no longer strong enough adoption of omni-channel banking is driving several
to thwart intruders. Today, merchants as well as banks to reduce the number and size in area of their
consumers need innovative security products that use branch offices. In the European Union alone, nearly
AI, machine learning and advanced fraud analytics 9100 bank branches were shut down by the end of
tools to protect their transactions, assets and data.

@ IJTSRD | Available Online @ www.ijtsrd.com | Conference Issue: ICDEBI-2018 | Oct 2018 Page: 173