19SEPTEMBER 2021HOW FINTECH AND DIGITAL ARE DISRUPTING BANKING AND REGULATIONBy Hedwige Nuyens, Managing Director, International Banking FederationCXOINSIGHTSBanks have always leveraged new technologies to deliver banking products in more effective ways, and that process continues today. The ultimate objective of innovation is meeting the constantly evolving customer needs for financial services. Banks, in order to be successful, have always faced, and met this challenge.Today's technologies are fuelling innovations that stand to deliver tremendous value to customers. Most FinTech activities leverage technology to provide, what is at its core, a fundamental banking service like lending or making a payment. The term FinTech--often used to describe the convergence of technology and financial services--is now the moniker used for technology-focused start-up companies, but new methods of customer interaction, data analysis, transaction processing and other traditional banking functions must not obscure the underlying reality that this process is inherent in banking. Technological change not only results in new risks, but also opens up new opportunities for banks and their customers. Indeed banks, service providers, and FinTech firms are increasingly adopting and leveraging advanced technologies such as artificial intelligence, machine learning, advanced data analytics, distributed ledger technology, cloud computing and application programming interfaces. Banks have adapted their business models significantly in the last five years. They have all become omni-channel, offering their services via traditional bank branches, self-service branches, phone, and online via desktop and mobile devices. They are available 24/7 through helpdesks, chat bots, mail, SMS, videoconference, and other forms of social media.Banks partner with FinTech in many forms: in-house innovation labs & hubs, joint ventures, and acquisitions. This has fostered a lot of innovations. Lending platforms use crowd funding to underwrite loans and provide credit. Payments are faster and cheaper. Financial markets have evolved significantly due to high frequency trading. And investment is much more accessible with robo-advisors.But banks have also been changing from the inside. They reshape themselves to be able to move faster, become more agile and learn to think digital from the start. The innovation cycle must go faster. Automation and cloud solutions can help to reduce costs, offer real time operability and enhance the overall customer experience.
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