Various technological developments influence every industry in today’s business world, and the financial sector is no exception. And the pace of change around the world is moving at breakneck speed. This massive transformation is creating revolutionary developments in the financial markets.
COVID-19 Pandemic
Obviously, the COVID-19 pandemic has been one of the most significant influences reshaping the financial climate. As businesses worldwide closed, workers left their jobs, and many were forced to work from home or assist in their children’s education.
Because of this, people began reevaluating their priorities regarding life balance, retirement, and what their children were being taught in public schools. When businesses began reopening, some workers chose to stay home with their children rather than return to the workforce.
Remote Working
The pandemic demonstrated to both employers and employees the viability of remote work. Employees enjoy the flexibility of being able to do their jobs from the computers at their homes. This eliminated the long commute times, allowed more time to spend with family, and it reduced the need for childcare.
Employers found that remote workers reduced overhead, spent less time chatting with their co-workers, and still got their work done.
This was initially thought to be a short-term fix. Instead, it resulted in a paradigm shift for many financial companies. Therefore, expect to see more financial industry employees working remotely.
Artificial Intelligence
Artificial Intelligence technology (AI) is being applied to new applications each day. AI has been a welcome addition to the financial industry in many ways. For starters, companies can use AI to deliver more efficient customer service around the clock. Also, banks are using AI to replace labor-intensive, repetitive tasks previously done by humans with robots that can perform the jobs quicker and more efficiently. But as Zeynep Tufekci shows in her TED talk, there is a dark side to using AI to make your decisions.
Digitalization
According to Pew Research, “The vast majority of Americans – 97% – now own a cellphone of some kind. The share of Americans that own a smartphone is now 85%, up from just 35% in Pew Research Center’s first survey of smartphone ownership conducted in 2011.”
This use of smartphones or other digital devices allows people to conduct most if not all of their banking and other financial transactions from anywhere with a cell signal or internet coverage. Today you can transfer money from your bank to your brokerage account, pay bills, and do your shopping, all with a few clicks from the convenience of your home. COVID also accelerated the growth of the home delivery industry, so consumers don’t even need to leave home to do their grocery shopping. Kroger has instituted a purely delivery grocery store system (i.e., no storefront, only a warehouse, and delivery drivers) in Florida, where they previously had no presence.
In just the past few years, the ability to deposit a physical paper check by simply taking a picture of it on your cell phone has eliminated one of the major reasons people previously visited brick and mortar banks. As a result, expect to see fewer physical bank branch locations in the years ahead as more people find fewer reasons to need a physical bank.
Cryptocurrencies
One of the most significant changes in the financial industry is related to blockchain technology, more specifically, cryptocurrency. These currencies are changing how people earn and use money while also changing how they invest their money. Like the gold rush, people aren’t just buying and selling cryptocurrencies, and they are also farming cryptocurrency. A big difference from the gold rush, however, is that just about anyone can do it from the comfort of their home. Companies like EQIFI specialize in specific crypto-farming such as DeFi. In addition, these specialized companies often have a means of trading crypto-currencies to different currencies, similar to that of a traditional bank.
Despite these massive changes within the financial industry, most experts feel these are only the tip of the iceberg for what is to come.
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