The financial services sector is seeing huge disruption, as businesses adapt their offerings and modernise their operations to benefit from emerging technologies. With the move to hybrid working, increased compliance in the sector and greater expectations from customers, the focus is on connectivity and the technology powering it. Seamless communication and secure, reliable data exchange is more important than ever for handling financial transactions, managing customer information and providing a superior customer experience.
Here, we look at how organisations within financial services are using the latest connectivity technology to meet the changing needs of the industry.
Connectivity is at the heart of fintech and Open Banking
The introduction of Open Banking was a pivotal moment for the financial services industry. Suddenly, financial institutions were able to pull data from other sources, transforming services for their customers. Meanwhile, a growing number of fintech applications were powering online banking portals, trading platforms and mobile apps. All of this relied on connectivity as the backbone of their operations, keeping banks and businesses connected with customers, partners and internal teams, while ensuring transactions were processed quickly, securely and in line with compliance regulations.
More recently, rapid developments in cloud computing, data analytics, AI and cryptocurrency, along with an increasing focus on security, mean that companies now expect more seamless, reliable and high-performance connectivity.
Cybersecurity, data privacy and compliance
The financial services industry is one of the most heavily regulated sectors in the world. Those operating within it are under increasing scrutiny with regards to data privacy and compliance. And the penalties for falling short of the obligations can be catastrophic. Penalties in 2022 amounted to more than $4 billion globally.
With the rise in fintech, cloud computing and mobile apps, the amount of data generated by the industry has risen exponentially. Secure connectivity technology is critical to help manage and protect sensitive data from unauthorised access. By leveraging connectivity technology for real-time monitoring, reporting and even predicting breaches, companies can reduce and mitigate risk while improving operational efficiency.
Optimising the digital experience for customers
At a time when customers expect smooth, seamless digital experiences, financial institutions face considerable challenges. A single disruption or service issue can have a serious impact on brand loyalty. 49% of consumers say that are likely to switch providers if they experience performance issues while using a financial app or service. And, as banks and other institutions within financial services continue to close physical branches, customers expect reliable, multi-functional and user-friendly connectivity in the form of online portals, apps and digital customer service channels.
AI and chatbots are playing a big role in this new era of financial services, helping banking institutions use technology for customer service and fraud control, while insurers can use it to assess risk and process claim. But none of these technologies can be used to their full potential unless deployed across modern networking and connectivity infrastructure tailored to optimise their application for the business, be it a major insurer or a local credit union.
Interoperability and innovation go hand-in-hand
The need for interoperability both on a global and a local level is critical. Only advanced connectivity technology can make this happen. The newest fintech applications must be able to communicate seamlessly with legacy systems, and new financial interfaces must be unified. It’s a formidable task, but the latest connectivity technology, such as advanced SD-WAN networking solutions and bespoke cloud services is allowing that to happen.
Future-proofing financial services for connectivity challenges
Current challenges for the financial services industry are huge, but connectivity technology is solving issues and future-proofing businesses, so that they can provide better, faster services to their customers. With the right advice, when upgrading connectivity infrastructure companies can interact more effectively with customers, gain new efficiencies, secure their networks and systems from cybercrime and fraud, and, crucially, comply with regulations in the jurisdictions where they operate.