How Technology is Affecting the Global Financial Landscape

Numerous industries have benefited from technological innovation and one sector that has benefited greatly from contemporary technological advancements is finance. In the last few decades, technology has essentially transformed how we interact and handle finances from a personal and organisational point of view. Payments are made and received easily using a plethora of platforms and tools. Many get to enjoy financial services they would typically only get from a brick-and-mortar banking institution from their hand-held devices. One can perform transactions from anywhere, only requiring a stable connection. The financial industry is being affected by tech, we simply cannot ignore that fact.

In the last week, different professionals in Gaborone heard from a team at Odoo, a company that focuses on developing technologies that create ease in process management for businesses. They offer a suite of tools for managing businesses, such as customer relationship management (CRM), e-commerce, billing, accounting, manufacturing, warehouse, project management, and inventory management. This tool simply put, is a one-stop shop for most if not all business processes for whatever size business one operates. Globally, many have been raving about Chat

Generative Pre-Trained Transformer, popularly known as ChatGPT which is a tool that will aid consumers in quicker decision-making for their purchases and business with faster communication of relevant information of their products and services. A tool that will replace Google search marketing? Nobody knows. One thing is for sure, each year, many technologies are developed based on user experiences that are meant to create an ease of use of money. Most of it is good but there are some pockets of scary realities that exist within this sphere too.

Where money is involved, there is typically an array of risks matched by governing principles and codes. The global community works very hard in ensuring that money is not being used to harm the planet, other human beings, and any other living things on the planet. However, one might wonder if technology has created a gap in financial regulations. How does the government, and corporations establish proper channels and regulations for finance’s newest entrants - Central Bank Digital Currencies (CBDCs), Mobile Money platforms that can allow fund transfers without the need for certain proof-points? Legal and compliance are never too far behind in the world of finance. For instance, any exchange of electronic data between financial institutions is governed by the ISO 20022 standard. This is in place for the maintenance procedure for the repositories’ content. It describes a metadata repository that contains descriptions of messages and business processes. The standard applies to the transfer of financial data between financial institutions, including information on payments, securities trading and settlement, credit and debit card transactions, and other financial data. Therefore, while tech companies continue to innovate – standards are being updated on a year-to-year basis.

Secure FinTech development is challenging, time-consuming, and most importantly, expensive. When approaching a FinTech project, teams from various businesses should have the necessary knowledge and experience with FinTech security requirements. Your project has a good chance of failing and costing the company more than it could ever imagine if none of these are in place. Making a highly secure and compliant financial platform without wasting resources is essential when investing in Fintechs. Consideration of the end-users experience with the platform is also crucial. There is no point in creating a FinTech application for a market that is incapable of using the platform effectively or even understanding it. Research plays a critical component in making sure that the financial solutions being developed by any organisation is a fit for that specific market.

The financial landscape is changing rapidly at the moment and is anticipating further changes in the next few years. Money plays an important role in everyday living and day to day running of organisations. It is important to stay informed on what changes are on the ground and which are underway. Seven key technologies, according to a McKinsey analysis, will propel fintech growth and mold the financial industry’s competitive landscape over the next ten years and it’s important to keep an eye on the progression of those different technologies. These technologies are:

1. Artificial intelligence will drive massive value creation

2. Blockchain will challenge current financial practices.

3. Financial services players will be liberated by cloud computing (as noted earlier with the Odoo platform)

4. The Internet of Things (IoT) will lead to a new era of financial trust

5. Entry barriers will be lowered by serverless, open-source, and SaaS

6. Application development will be redefined by no-code and low-code.

7. Manual labor will be replaced by hyper-automation. Artificial intelligence, deep learning, eventdriven software, and robotics are all examples of hyper-automation.

Whether you are a big player or small player in the financial services sector, the advancement of technology in today’s business landscape cannot be ignored. All players must stay well informed about new developments that affect the industry. Being aware helps anyone be in a better position to plan for their personal finances, for that of their organisations, and the people that will get affected in any process that takes place in those instances. An important step in managing any change is staying informed.