The financial services sector has long been at the forefront of technological innovation, but its next challenge will be to speed up transaction times, writes finder.com.au co-founder and director Fred Schebesta.
Finder.com.au co-founder Fred Schebesta, who will be speaking at the 16th annual Wraps, Platforms and Masterfunds Conference in the Hunter Valley on 14-16 September, discusses the evolution of technology within financial services.
In his 1999 book Business at the Speed of Thought, Bill Gates predicted: “Automated price comparison services will be developed, allowing people to see prices across multiple websites, making it effortless to find the cheapest product for all industries.”
Flash forward 17 years and I’m the co-founder of a comparison service site, so it seems that Gates was onto something.
At the time of his prediction, the world wasn’t ready to adopt comparisons.
Most internet connections were still dial-up, and transactions were rarely conducted online.
As a result, the idea of a website that had the sole purpose of increasing financial visibility across a multitude of products would not have been remotely successful – or well received.
But since 1999, a lot has changed. Comparison sites are probably the best way now to save money, and thankfully, almost gone are the days of manual bargain hunting.
In terms of the financial services sector overall, it’s arguably the development and evolution of the iPhone that has completely shifted the business climate the most.
As a result, accessibility is probably one of the most current topics of our era, especially in financial services.
We’re seeing ads for ‘tap-able’ phone payment. Almost all Australian banks have apps. Innovation is much more an aspect of the finance sector than it’s ever been before.
Imagine trying to convince someone back in 1999 that one day they would be able to tap their phone onto a tiny machine and automatically money would come out of their bank accounts.
The technology we’re witnessing at the moment is the most innovative of its time, and the finance sector is at the forefront of these evolutions.
But there’s one thing innovation hasn’t quite managed to fix yet: the expendability of time.
While it’s certainly getting there, the time-saving aspect of back-end finance still has a long way to go.
And in such a fast-paced world and an even faster-paced financial industry, it’s not feasible any more for financial transactions (often even the online ones) to take as long as they do.
For example, have a look at our current banking deposit process.
Let’s say you go to your closest branch and deposit a cheque into an ATM.
Three days later, it’s processed and is finally accessible.
Despite all of the technology we have available at our fingertips, the back-end process time is still very long. In fact, some paywave facilities can still take multiple days to process.
At the front priority of technological advances should be the implementation of more efficient payment processing times.
Although it’s quick and easy to ‘tap and go’ or to transfer money online, the time it’s taking for the money to actually go through is going to become unrealistic very soon.
Another area that requires improvement is online security – the financial sector needs to work to ensure that customers feel safe when conducting transactions online.
Sure, high levels of encryption have paved the way, but there is still a long way to go.
The development and evolution of core processing, online banking, mobile banking, and other fundamental branches of the finance industry is paramount.
In coming years, we’ll see faster information, greater transparency, quicker back-end processing, greater security, and drastically improved risk management.
Seventeen years ago, Bill Gates predicted huge technological change in the finance sector, and we’ve already encompassed much of it. But at this point, the possibilities are endless.
Technology is always going to advance, and we can never really completely predict the future.
All that’s important to know is that change is coming, and it’s going to be big.
Fred Schebesta is the co-founder and director of finder.com.au. Book your ticket now to see him speak at the 16th annual Wraps, Platforms and Masterfunds Conference in the Hunter Valley on 14-16 September.
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