The financial services industry is booming with technology-based advances and innovations all brought on by the digital transformation. This boom has led to the rise of FinTech—technology for the financial sector that makes payments, services or transactions more efficient and convenient for consumers.
The benefits of these FinTech solutions can easily be seen. They are aiding in operations, increasing bottom lines, driving consumer engagement and in some cases improving security measures. Yet these same advances can catch businesses off guard, leaving them unprepared for potential risks and threats.
Let’s take a look at some of these FinTech trends and how your business should partner with or prepare and protect your assets:
Trend 1: Cryptocurrency and the Blockchain
New, growing forms of digital money or cryptocurrencies, such as bitcoin have changed the way payments are made and received. Blockchain technologies act as a decentralized ledger to keep a record of all cryptocurrency transitions.
The Pros: The blockchain is noted to be the most secure way to transfer payments
The Potential Threat: Using blockchain could eliminate the need for traditional financial intermediaries, significantly shifting financial service provider’s direct or indirect business models. With bitcoin, itself as an alternative form of currency, it has not yet been regulated and has undergone market highs and lows. There are likely to be continued changes until this form of currency stabilizes, meaning your business is along for the ride.
Trend 2: Mobile Wallets
It is no surprise to hear that more and more consumers are using their mobile devices. Advances in the “mobile wallet” allows you to make virtual payments from any mobile device. A recent report from Juniper Research predicts mobile wallet spending will increase globally by 32 percent to a total spend of $1.35 trillion.
The Pros: This is an effective way to get ahead of the competition by meeting consumers where they are at.
The Potential Threat: Online banking has brought on its own set of threats from cyber hackers. Encouraging customers to utilize their mobile devices can open your business up to the same type of risks, just on a new platform.
Trend 3: Biometric Security
To help combat the potential security threats with online and mobile banking, biometric technology or using physical attributes such as a finger print or face recognition to authenticate a user has begun.
The Pros: The purpose and intent is to find a more secure way to conduct virtual transactions.
The Potential Threat: Mainstream applications of this technology are still so new and can lead to breaches in security. There has been a struggle to find a balance of being too restrictive (i.e. when styling your hair differently could cause a false alarm) or too lenient (i.e. it may recognize facial similarities that others could falsify).
Business Continuity Management for Any Innovation
These three trends are just a few of the ways the FinTech sector will continue advancing. Amidst these changes, it is critical that financial service providers plan for and protect their organization for whatever may occur. Business continuity planning gives financial service organizations the confidence to face the unknowns, find resiliency and protect what matters most.
Written by Assurance Software
Assurance Software takes your company’s enterprise-wide business continuity and resiliency program to the next level. With Assurance as your go-to partner for continuity and resilience, you can confidently mitigate risk, manage recovery, and safeguard your employees, customers, operations and brands.