n 2022, an estimated 64% of global consumers used at least one FinTech application, a percentage that has doubled over the past five years. More than half the human population relies on FinTech platforms for their banking and investment needs.
The financial industry has experienced a seismic shift within the past decade as a more connected world drives demand for ubiquitous device-driven consumer experiences across every sector. With the increase in demand for digital consumer experiences, monetary transactions will continue to accelerate in speed and efficiency. FinTech companies will require more automation to streamline operations and the customer experience.
How decentralization in FinTech Drives the Need for Automation
Cryptocurrencies are one recognizable application of FinTech. Cryptocurrencies have led to a rise in startups offering innovation in selling and trading digital assets and NFTs. More traditional financial tech companies have also adopted crypto trading into their models.
The technology that has enabled always-on, instant trading of these digital assets has fundamentally altered how traditional markets operate and the need for always-on computer-driven transaction automation.
Almost all FinTech applications today rely on a web of interconnected API services to transfer data back and forth across many functions, including financial data processing, customer onboarding, know your customer (KYC), RegTech, payment processing, and other service-oriented enrichment APIs.
Connecting to these service APIs typically requires much development time to integrate into a FinTech application. Automation solves this problem, and the tools offered by companies like Workato, Automation Anywhere, and Microsoft reduce development time and enable quick centralization of API communications cutting integration time in many cases by 75%.
Automation connects systems in different sectors to work towards a common goal. One of our partners, Workato, outlines the benefits of optimizing automation in FinTech.
Streamline your FinTech operations with low code automation expertise contact us here! or email us moreinfo@cloudscale.io
Some of the trends already streamlining traditional banking processes include:
Robotic Process Automation (RPA)
Robotic Process Automation (RPA) refers to "bots" created to automate simple tasks. Bots help to increase workflow, save time, and boost accuracy.
Here are some of the ways banks incorporate RPA into their existing systems:
- automatically generating reports
- processing payments
- money transfers
- customer onboarding
As automation technology improves, these "bots" can complete more complex tasks, continually reducing the number of menial tasks employees must perform, allowing them to focus on more creative tasks. Bots remove human error from the equation and can sort through data which helps speed up transactions.
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Advanced AI Automation
Artificial Intelligence technologies create opportunities for the FinTech sector to gain a competitive edge by streamlining complex processes and adding predictive and behavior analysis capabilities to FinTech applications and the underlying service layers. AI automation builds upon existing financial technologies for more complex and proactive decision-making capabilities.
Some of these actions include:
- market forecasting
- investing
- buying and selling
- fraud detection
- In-app upsell and buyer prediction
AI algorithms identify patterns that help customize how consumers interact with banking systems. It can also find potential risks and errors before they happen.
Machine Learning processes can help discover critical data trends and accurately predict precise outcomes.
IPaaS Solutions Using the Cloud
IPaaS stands for "integrated platforms as a service." It uses cloud software to draw connections between different endpoints.
FinTech compannies benefit through reduced development time and a broader ability to connect to different applications, processes, and data.
Read more about how banks can benefit from IPaaS.
FinTech Companies Advancing the Use of Automation
These companies have transformed their respective sectors by implementing automation processes into their business models. Some companies mentioned exist entirely in the cloud and execute thousands of automation transactions a minute.
Revolut
Revolut is a mobile banking system based in the UK and has recently expanded to many EU countries as well as the US and Japan. It takes FinTech concepts and applies them to all banking service offerings while existing entirely online.
Revolut offers:
- bank accounts
- credit cards
- payment transfers
It differs from traditional banking services because it allows the transfer of money into 25 different cryptocurrencies. As FinTech applications grow, automation enables the transfer between conventional currencies and decentralized cryptocurrencies in seconds.
Chime
Chime offers an alternative to traditional banks relying on overdrafts and monthly fees to fuel their growth. Instead, Chime provides these same services to consumers by eliminating unnecessary barriers to successful banking and utilizes technology and automation to drive better economies of scale, which it passes on to the consumers of its banking application and services.
Chime relies on FinTech automation to effectively offer the same services as most banks, only better and faster, eliminating the need to rely on geographic location for most financial services. Like many new up-and-coming digital banks, Chime leads in using automation and FinTech to improve effective personal banking.
Online banks are becoming much more accessible than ever before.
Traditional brick-and-mortar banks may soon be a thing of the past as more neo-banks, or banks that function entirely online like Chime, gain traction.
Stripe
Stripe offers services that allow businesses to:
- complete payments
- corporations to pay employees
- subscription payments
- software platforms
- management of invoicing
- fraud protection
While Stripe doesn't offer payment services for crypto markets, it functions as the leading brand for API-driven fiat payments.
OpenSea
Speaking of cryptocurrencies, OpenSea is a leading startup that has created a marketplace exclusively for trading NFTs (Non-Fungible Tokens). It allows you to buy and sell as well as create NFTs and has built the most powerful market platform for the trading of digital assets.
Streamlining FinTech automation remains key to the company's success as it offers security in selling and trading and has built a system that safeguards against fraud. OpenSea allows for multiple financial transactions and processes on one platform designed to be accessible and user-friendly.
It gives more people the opportunity to generate wealth independently.
Robinhood
Robinhood joins in the larger mission to democratize financial investing and trading. It offers a digital wallet for transferring crypto assets while expanding to other financial offerings such as cash and credit cards.
It has created an easy-to-use and approachable platform for building an investment portfolio.
Choosing an Automation Platform
As fintech companies evaluate integration and automation platforms to manage their SaaS applications, databases, and microservices, they should look for the following criteria:
- An agile platform that facilitates rapid time-to-deployment
- Adapts to changing conditions
- A unified, elegant solution to both integration and automation
- Cloud-based, serverless enterprise automation
- Alignment of business goals and automation strategy
- Real-time, event-driven data operations
- Orchestrating internal processes across SaaS apps
Implementing Process Automation for Fintech
CloudScale is a leader in enterprise automation with a specialty in FinTech. The technologies we use are trusted by companies, including Grab, Mosaic, and Fundbox, for enterprise automation.
Learn more by contacting us! or email us moreinfo@cloudscale.io
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