How Automation is Transforming the Fintech Sector – FinSMEs

Its pretty ironic to consider how automation is transforming the fintech sector when fintech transformed the financial sector.

Perhaps its testimony to the speed and pervasiveness of technological advances that the disruptors are being disrupted.

Transformation today is coming from hyper-automation, intelligent automation, or extreme automation. These terms mean that automation tools are very sophisticated and are being used in combination with each other.

Lets look at how they are being used for fintech applications.

Fintech companies have used technology to cut costs and time and replace traditional institutions. However, they must also provide quality, customer trust, and regulation.

Advanced automation tools provide the solution.

RPA has been with us for a while. These are the bots that automate routine and rules-driven tasks. They are efficient, tend not to make human mistakes, and significantly cut the time and cost of repetitive tasks.

However, these bots cant deal with complex, dynamic processes and workflows.

This is where Artificial Intelligence, Machine Learning, and Natural Language Programming come into play.

In these technologies, the software learns from itself and uses guiding principles to solve new problems.

AI is the science of using computers to mimic human intelligence. It is a form of advanced information processing.

For example, in the financial field,

Machine Learning is a subset of AI.

Systems learn from data, identify patterns, and use algorithms to predict outcomes. It is particularly useful for data on a large scale.

For fintech,

NLP is a subset of ML.

Computers now understand, analyze and even generate human language.

We know how Google can find relevant search results, translate pages from one language to another, or auto-correct spelling. NLP has now moved to recognizing speech and answering questions. It generates text from images or videos and detects sentiment.

All these functions are relevant to fintech.

A blockchain is particularly well suited to fintech.

It is a virtual ledger of transactions, tracing the transfer of ownership of assets. Records are authenticated by computers spread across the world and cannot be altered. Everybody has access to the same data in real-time.

Smart contracts can be attached to transactions, automatically triggering actions when pre-defined conditions have been met.

Automation is even better when techniques are combined.

The ultimate combination is blockchain and AI. AI deals with large data sets, and blockchain provides security, trustworthiness, and quality to that data.

Ultimately, there will be trading on blockchain as the tokenization of assets becomes more prevalent and datasets grow. AI and ML will be used for pattern detection and predictive algorithms.

Advanced automation tools such as artificial intelligence, machine learning, natural language processing, blockchain, and smart contracts are transforming the fintech sector.

They bring both convenience and security to fintech applications and open the door for new products and services.

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How Automation is Transforming the Fintech Sector - FinSMEs