The COVID-19 pandemic has accelerated digital transformation in pretty much every industry, and the financial sector is no exception.
- Marketplace as a Service
- Blockchain-based systems
- Banking as a Service Modules
- Authentication and authorisation solutions
- There is more to do
The newest technology and creative innovations are reshaping (or possibly redefining) the banking, insurance, investing, and wealth management sectors, replacing conventional business structures and procedures. For both staff and clients, everything must be more digital, more online, and simpler to manage remotely.
Financial institutions were forced to modify both their client interactions and how they handle internal, back-office activities as a result. Despite its difficulties, the digital transformation has provided these organizations the ability to move away from their outdated, traditional departments and toward more cutting-edge virtual platforms, hence lowering the demand for pricey physical service points. Additionally, when the change is managed well, it creates new sources of income in the form of fresh customer-focused services.
But specifically what type of digital solutions do they use? You’ll find a few impactful instances below (with which Future Processing is happy to be affiliated).
Online market as a service
Marketplace as a Service (MaaS) from 21finance, which gives banks and financial intermediaries the option to set up and manage their own digital online shop for financial goods, is one of the best instances of a digital transformation solution. Customers of the fintech may grow assets under management, save operational expenses, gain new clients, and eventually open up new income channels by optimizing their sales channels.
MaaS benefits financial institutions as well as their clients, such as investors and issuers. Everyone receives a completely holistic experience that is catered to their specific needs thanks to client confidentiality, a 24/7/365 support desk, data protection, full compliance, cheap service costs, transparency, access to a competent partner network, and much more. If they so want, MaaS clients can co-place items across a number of markets operated by banks, asset/wealth managers, and other intermediaries, or they can reserve additional banking services like cryptocurrency custody and brokerage, liability umbrellas, and many more.
Blockchain-based technologies are an additional excellent illustration of cutting-edge digital solutions. Blockchain not only increases transparency and significantly reduces fraud risk for the financial services industry, but it also lowers service costs for clients. to, say, lower costs). Financial organizations are now using systems like these to establish and maintain data integrity and security as they deal with massive datasets.
The primary benefits of blockchain in finance:
Greater security and improved transparency: Payments, money transfers, and other actions are all made easier to track. Additionally, the information flow between all participants is protected by cryptographic techniques.
Market growth for cryptocurrencies: Blockchain offers seamless exchange services and lowers the barrier to entry for alternative digital currencies.
quicker payments Blockchain facilitates high-speed payments by acting as a decentralized payment ledger.
Across several sectors, this technology is still being created, improved upon, and tested. But it has already been able to significantly change the financial sector.
Modules for Banking as a Service
Another service that 21.finance provides is called Banking as a Service Modules (BaaSM), which is intended for marketplace operators (financial and non-financial organizations) and their issuers who wish to include various banking services into their platforms and operate under their own brand. It’s a simple, adaptable approach that helps everyone.
Top 3 modules for banking as a service are:
For trading digital assets, such as cryptocurrencies, there is cryptocurrency brokerage. Access to current market information and updates on changes in the market are also included.
Crypto Custody: Offered by a bank with a BaFin license, this provides the highest level of protection for trading crypto assets around-the-clock.
Providing assistance to issuers in the computation and disbursement of dividends, interest, and repayments, among other things.
For the financial institution and its clients, operating on a platform with customizable modules works brilliantly.
Solutions for authentication and authorization
Every financial institution should prioritize enabling secure authentication and transaction authorization. In light of this, CoCoNet created the MULTIVERSA Token for PC users in addition to mobile applications.
Two secure solutions for token apps:
The RSA keys needed for user authentication and authorization in all linked apps, including banking portals, are stored in the token app for smartphones. It supports facial recognition and fingerprint ID as well as other biometric access methods.
The desktop token application, nevertheless, doesn’t require any additional hardware and all private keys are safely kept on the user’s computer (using Microsoft Windows or Apple macOS systems), which greatly simplifies the process. It conforms with the EBICS standard and meets PSD2’s security standards.
Without sacrificing security, both MULTIVERSA applications may replace complex (and sometimes quite costly) solutions for user authentication and authorisation. Actually, they do the exact opposite; they raise the bar for security.
More has to be done.
The solutions outlined above are only a few instances of the potential of cutting-edge new technologies that are upending the financial sector. However, when all of them are used together, financial services become more universally trusted, user-friendly, intuitive, and secure.
Naturally, not every solution will be a good fit for everyone, so you must rely on trustworthy advisers and make wise financial choices.
Head of Marketing at 21.finance Susanne Bichlmair contributed to the writing of the article. The business, which was established in 2017, gives banks and financial intermediaries white-label software so they can run their own marketplace.