Financial technology – software developers at the core of transformation
Financial technology or fintech is about to reach $161.2 billion in the next five years. The fact that software development is radically and constantly reshaping our society is by now well known. Especially since these changes are no longer just business-related, but swifts that affect us every day, on an individual level.
However, businesses are at the front row when it comes to witnessing the full power of technology. And the adoption of fintech practices has already elevated one of the oldest industries, banking.
Which industry spends the most on technology?
It might come as a surprise to some, but the biggest spending industries on technology are not the healthcare industry or the automotive industry, but the finance, more specifically banking.
Fintech is a rapidly emerging concept that has already transformed banking. Fueled by consumer-behavioral changes, by the crypto popularity, and mainly by the pandemic, banks have shifted toward more digitalized, contactless, and ultimately more humanless financial technology practices.
67% of businesses in finance increase their IT budget in 2022
IT budgets are increasing across the whole business ecosystem, across all industries. However, The financial sector is leading when it comes to budget increase in the next year.
According to a study by Spice works, over 67% of businesses in the financial sector expanded, or expect to expand, the IT budgets for the following year. The main drivers to this budget increase are multi-year efforts of modernization, the shift to cloud, and more complex security procedures – which are focal points in financial activities.
100 thousand jobs less in the following five years in the banking sector due to financial technology
These budget expansions also bring about the rethinking of day-to-day banking. A proportion of typical banking personnel will become obsolete as technology takes over the center stage.
As stated in the Wells Fargo & Co recent study, over 100 thousand jobs will disappear due to financial technology, automation, and innovation, over the following five years.
On the other hand, software developers will become the new bankers, as there is an increasing need for professional IT personnel to bring about technological change.
Digital banking on the rise
In a short period, enabled by the pandemic, banks changed their behavior quickly. They digitalized processes and offered contactless alternatives to many banking practices. UX has become a critical differentiator in the industry, where challengers capitalized fast on this point. Whether opening an account, buying an insurance product, the gap between early adopters of technical advancements and latecomers is huge.
A survey by Deloitte conducted in the summer of 2020 on 256 banks shows that 34% of the organizations created fully digital processes, 18% launched contactless payment methods, and 23% of banks introduced digital customer identification and verification methods due to the effects of the pandemic.
These practices will not take a break, but on the contrary, they are the new accelerated normal in the industry, shortly.
AROBS Financial technology
AROBS’ designated fintech software teams have been enabling digitalization in the financial sector for years now. Their agility, know-how, and understanding of the industry managed to reach top players in the financial industry, nationally and internationally.