The financial services sector is not known for making hasty decisions. But the industry is at a critical public perception turning point. Institutions aren't responding fast enough to competition from startups offering new digital services. Intel is already working in the industry to enable scalable standards for technology and security. This blog will highlight three tech segments in particular that will push traditional banking further into the digital age: blockchain currency, the Internet of Things (IoT), and cloud storage.
Blockchain: Regulation, Security, and Privacy
Blockchain currency, or cryptocurrency, is a decentralized, replicated peer-to-peer finance network capable of recording transactions. It's poised to transform payment processing by eliminating opaque and inefficient back-office systems. Major financial players like Visa, Nasdaq, Citi, and Capital One invested in blockchain currency in 2015.
And yet, questions of regulation, security, and privacy continue to surround the implementation of blockchain. Intel is working to implement trusted execution environments on its hardware chips to enhance security and privacy for blockchain users. Further, Intel is looking at developing highly customizable blockchain solutions that can be scaled up to millions of nodes for large-scale use-case scenarios. The first real use-case for blockchain technology would most likely not be used for FinTech, but instead in scenarios such as in-game credits for online games.
The Internet of Things and Money
In the push to adopt cutting edge FinTech solutions, financial services can’t ignore the Internet of Things. Indeed, there have been many failed ideas to come out of this new trend, but there’s also the potential for revolutionary technology. This technology could change how customers use and interact with financial services brands. IoT can connect customers to businesses in new ways. It can also empower them to make better financial decisions throughout their lives.
But the fact that so few established enterprises have yet to adopt these new technologies isn’t a huge surprise. The biggest hurdles to overcome? Regulation, compliance, and customer engagement in a changing environment, and the constant influx of new competition.
As the industry evolves, brands should concentrate on delivering customized and consistent experiences across all channels. Adopting these new methods requires a change in the very operating model of financial services. Brands will need to develop aggressive strategies that proactively participate in and lead digital disruption — rather than waiting and reacting as they’ve done in the past. This will help traditional financial organizations innovate at a pace that keeps them competitive.
In the Cloud
In the digital service economy, a key limiter for financial institutions is the data center infrastructure. Financial services have evolved beyond an era of servers dedicated to a single workload or department. Now, virtualized servers share infrastructure across departments. But the next shift is focusing on agile and efficient service delivery through cloud storage.
The consumer space jumped on cloud solutions fast. Financial services have held back, fearing potential security breaches. Replacing legacy architecture and IT silos with the cloud is helping banks get a 360-degree view of customers and their enterprise. These measures are improving operational efficiency, enhancing customer engagement, and supporting compliance and risk management.
The financial services sector is finally waking up to the innovations that startups have been creating for years. And old financial enterprises are finally ready to tap into this collective innovation. But it’s not that easy.
FinTech is disruptive in both a collaborative and competitive way, leaving traditional financial services with a lot of catching up to do. The good news is that these FinTech startups drive a culture of innovation the industry can leverage to deliver value in new ways. Intel is helping them do just that by delivering solutions for financial organizations to make this shift as easy as possible.