Seven technological improvements that revolutionised the finance industry.

FinTech (financial technology) is a catch-all term referring to software, mobile applications, and other technologies created to improve and automate traditional forms of finance for businesses and consumers alike. Combining financial processes and activities with new tools and technologies made business faster, easier, and more efficient. Therefore, we want to introduce recent trends in the fintech industry, which combine both fields.

1. Digital payments and bank services

Paying your suppliers with bank transfers is time-consuming, exhausting, and bureaucratic. Therefore, digital payments on the computer or via smartphone have become indispensable. In cooperation with technology companies, the banks provide various fintech services, e.g., virtual cards, which make purchases and other payments very flexible.

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2. Biometric security systems

Simply using passwords to protect accounts, documents, or other online systems from others is long outdated. Now, companies use facial recognition, voice recognition, and fingerprints for identification. Increasingly, two- or more-factor identification also requires the first form of protection, e.g., a password, and a second step, e.g., a fingerprint, for unique identification. These diverse possibilities make working in the financial sector more secure.

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3. Virtual cards

The change from physical to virtual card solutions offers various advantages. First, using virtual cards completely eliminates the bureaucratic and time-consuming paperwork. This improves cash flow and speeds up the entire workflow within the company. Second, virtual cards can significantly reduce, if not eliminate, the risk of fraud and theft. They, therefore, have a clear advantage over physical cards from a security perspective. Third, they can be adapted to the individual needs and regulations of the company. Depending on the amount or category, another person, e.g., a manager or another department, must approve the purchase before the virtual card is available. The management has control and can easily keep track of all expenses, even of the maverick and long-tail spend of the company and its employees.

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4. Big Data

With new technologies come new opportunities. Technology allows the financial industry to collect and analyse vast amounts of data and store it in data warehousing and cloud services. Companies use this data to feed predictive models; enterprise spend management, cash flow optimisation and other systems. The challenges associated with big data include protecting and processing data according to legal and ethical standards. In the European Union, for example, the General Data Protection Regulation (GDPR) regulates the collection, processing and storage of personal data and protects consumers and their private data.

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5. Cybersecurity

Different processes and activities in the fintech branch deal with sensitive information, e.g., bank account details or personal data. Therefore, companies must be vigilant and constantly develop new methods and programs to protect these data and processes from dangers such as hacker attacks, fraud or theft. This is why compliance and security frameworks, like PCI DSS, must be in place to protect data and customers.

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6. Artificial Intelligence (AI) and Machine Learning (ML)

This trend holds a lot of potential for the future. With AI and ML, companies can streamline processes, reduce manual tasks, and be more efficient overall. It can also identify and manage threats and cybercrimes. In addition, AI and ML can also support other process atomizations, such as invoice management, subscription management, supplier onboarding and general administration in the processing of customer data or customer relationship management.

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7. Blockchain

A Blockchain is a system that stores and manages diverse transactional data. Blockchains can be used decentralised and independently from any third party.

This technological infrastructure is very safe and makes it difficult to exploit or hack.

Bitcoin, for example, is based on this technology. Overall, the relevance of blockchain technologies for the financial sector has increased significantly in recent years, not least due to forward-looking developments such as Decentralised Finance (DeFi).

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Overall, there are many more technological solutions and tools that offer companies various opportunities for the future. Improvement in the Fintech industry comes fast and with high efficiency. These new trends are just the tip of the iceberg that is arriving to challenge the status quo of finance and technology. Comprehending the above-mentioned technologies can help create new processes to bring change. Driven by these values, Mazepay delivers an all-in-one expanse management software that enables seamless control of your indirect spend.