As IT technologies have been successfully introduced into various fields, they have provided people with new opportunities and benefits, and the financial industry is no exception. Thanks to revolutionary changes in the information technology field, the financial industry has undergone significant transformations that are worth studying. From differences in payment methods to intelligent analytical systems development, IT technologies have become a necessary component of successful work in this field. Let’s look at some examples and benefits of using IT services in finance to understand better how these innovations affect our financial deals and decisions.
In this blog post, we’ll explore the impact of IT on finance, and its specific benefits, and highlight areas of finance that have been most impacted by IT.
How IT Advantages Transform the Finance Industry
IT's Role in Enhancing Data Safety in Finance
IT services provide many reliable and convenient solutions related to the security of confidential data and its protection from leaks. Data protection is relevant not only for financial institutions but also for various industries. According to statistics, the number of cyber attacks on various organizations in 2022 in the UK increased by 77%, compared to the previous year. This applies not only to finances but also to education, healthcare, etc.
Data protection is also important for e-commerce web solutions, where working with product and customer data is also one of the key areas in the industry. As a rule, e-commerce solutions are created on the basis of ready-made templates. But, on the other hand, such templates have open code that can be easily broken by Internet fraudsters.
“If we’re talking about a custom e-commerce solution with a custom code, which was specially written for this online store, fraudsters can’t get this code from anywhere, and they can’t see it. Accordingly, they can’t find holes, and this code is much safer,” says Pavel Moroz, TuneLAB CEO.
Speaking about the financial sector, the institutions have their own data protection mechanisms, such as protection against unauthorized access, blockchain technology, and multi-layer authorization mechanisms.
Last but not least, data protection is provided by blockchain, which has gained wide popularity due to the fact that this system allows safe storage and transfer of funds and other resources. Blockchain is a distributed database that consists of blocks. Each of these blocks stores information and is connected to each other using cryptographic methods, forming a continuous chain of blocks. Each block contains a certain amount of data and the hash of the previous block. In such a data system, it’s impossible to edit or remove data in previous blocks without changing all subsequent blocks, which makes the system very resistant to manipulation and deception.
How IT Services Boost Customer Loyalty
Various financial institutions are increasingly using modern technologies because it improves the banks’ customers’ experience. Mobile banking is a vivid example of IT functions for finances. Using mobile banking, customers can perform any financial transactions on their smartphones, without the need to leave the house to the nearest bank branch.
The percentage of people who use mobile banking is growing rapidly in Europe, for example. So, in the UK, 74% of citizens use smartphones to manage their finances. It would seem that today’s technologies are best suited for the younger generation of millennials and zoomers. However, according to research, older generations also prefer IT technologies too. So, 91% of Generation X and 79% of Boomers also prefer mobile banking.
IT's Role in Process Automation
The high percentage of people who use IT services in finance is due to the fact that modern technologies and web-based solutions are able to automate repetitive tasks, such as invoicing employees, utility bills, etc.
Today, almost every self-respecting bank – from the leading American banks to the Ukrainian PrivatBank – offers its customers a mobile application, which, in fact, performs most of the functions with funds that were performed in bank departments 10-20 years ago.
Mobile banking applications allow you to quickly and easily carry out various financial transactions, such as transferring and receiving funds from one card to another, replenishing a mobile account from a card, paying taxes and utilities, etc.
How IT Services Elevate Employee Efficiency in Finance
Respectively, monotonous process automation and data process improvement have a positive effect not only on customer service but also on employees of financial institutions.
As Fraser Stewart, author of the article “How fintech can improve data access for finance institutions” writes fintech companies provide a flexible approach to working with data improve collaboration between market players, and improve the process of data sharing.
“Finally, the enhanced use of data has the ability to improve business operations by transforming the way financial institutions make decisions, manage risk and serve their customers. Data-driven decision making, powered by technologies such as artificial intelligence, machine learning and big data analytics has now been made possible through the solutions the fintech industry offers,” says Stewart.
For example, employees using the CRM system are able to quickly find the necessary information about a client and their data (for example, information about debts, utilities, etc.). In addition, the client’s data processing automation reduces the likelihood of errors, accidental duplicates and makes data processing more consistent.
Cloud storage provides flexible and fast access to data in the field of finance. Firstly, cloud storage is able to store a large amount of data, and secondly, it gives employees access to the database from any device at anytime. In addition, cloud storage allows for rapid updates of large volumes of data in the fast-growing field of finance.
The benefits of IT technologies for finances are extremely important and obvious. These technologies allow you to automate repetitive processes, provide higher data protection, and security of financial transactions, as well as efficiently analyze large volumes of data to make informed decisions. Examples of these benefits include banking transaction automation, creating personalized financial services for customers, reducing fraud risk, and significantly increasing the productivity of finance experts.
In conclusion, IT technologies have become a key driver for the modernization of the financial industry, allowing it to move closer to a more convenient, fast, and innovative future.
