Given the current pandemic situation, the digital world's transition has become inevitable for the financial and banking sectors. The pandemic has boosted digitization, which has led to more and more people engaging in digital and online banking.
FREMONT, CA: The current pandemic has brought the world to a standstill and has created severe economic problems. The financial and banking sectors have also slowly begun to experience tremors. With almost all sectors struggling to keep up with these economic conditions, all eyes are on the financial industries to prevent an economic holocaust. According to Wakefield Research and Concur's research, almost 84 percent of small businesses rely on manual processes for most of their work. As one of the sectors that still needs a lot of manual labor, financial institutions need to make significant changes to their operations to comply with the new rules.
How does COVID-19 affect the financial sector?
Several companies in different sectors are trying to avoid bankruptcy, and there is very little that the banking and financial sector can do to help. Several companies have opted for employee layoffs and changes in investment strategies to survive the crisis. Despite the problem, digitization is the only way for the entire finance industry to get back on its feet and control the economy again. But banks cannot opt for these options because they have to deal with falling demand, lower incomes, and shutdowns in production.
The pandemic has made digital transition inevitable for the financial and banking sectors. It has boosted digitization, which led to more and more people engaging in digital and online banking. The financial industry has undergone a digital revolution. Banks and financial institutions entering the financial market on digital platforms are experiencing an increase in profitability and market share.
Customers have already adopted digital means for carrying out various transactions. Fintech is becoming increasingly common as the majority of financial institutions are using technology to advance their services. New technologies are being extensively implemented in the finance sector. Cloud computing, Big Data analysis, machine learning, artificial intelligence, and blockchain, which have been exposed to a fraction of the players in this sector, are slowly starting to spread their reach, bringing many institutions under their umbrella. Increased security practices in the digital payment sector are also making the digital finance industry increasingly attractive.
Addressing the growth in compliance risks
With all technology fields moving forward to help other industries, many fintech, and regtech firms have developed automated compliance and risk management solutions. Although these solutions are state-of-the-art, tech companies mainly focus on their solutions' technical and security aspects. This is indeed necessary because of the enormous amount of data on the web; most tech companies cannot deliver on the regulation and compliance level that financial institutions need to follow.
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