# Future of the Finance Industry Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-11-04 Category: FINANCE Category URL: https://financedigest.com/category/finance Meta Title: The Top 5 Future Trends Transforming the Financial Industry Meta Description: Discover how AI, blockchain, and digital money are reshaping the financial services sector. Explore the top trends with Dr. Hassaan Khan at Arden University. URL: https://financedigest.com/future-of-the-finance-industryhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/istock-1090482098-1736814912136-compressed.jpg) _![](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/465-1736814912128-compressed.jpg)_ _By **Dr.Hassaan Khan,** Head of School of Digital Finance, Arden University_ With the emergence of AI and blockchain, the future financial services sector will be very different from the one we know it. The Global Financial Crisis in 2008 and the recent Covid pandemic have led to a faster than expected transformation of the finance industry. Furthermore, innovation and technology are driving the change to new paradigms.  Below, Dr Hassaan Khan lists out the [top five trends](https://www.financedigest.com/top-5-payment-trends-for-2016.html "TOP 5 PAYMENT TRENDS FOR 2016") that are already transforming finance and will continue to change the financial industry in the next decade. 1. **AI and machine learning are the** [future of finance](https://www.financedigest.com/enterprise-automation-is-the-future-of-finance.html "Enterprise automation is the future of finance") Chatbots — for those [financial institutions](https://www.financedigest.com/3-ways-financial-institutionscan-leverage-live-engagement-on-social-media.html "3 ways financial institutions can leverage Live Engagement on social media") that even deploy them — in general, are helpful in directing customers in transactional tasks, such as how to use mobile remote deposit capture or finding an ATM. But most of them lack the ability to handle more complicated conversations. Conversational AI is gathering momentum and [financial institutions are stepping up investment in the area to better manage client data](https://www.financedigest.com/data-fake-will-be-the-new-real-in-financial-services-in-2023.html "Data: Fake will be the new real in financial services in 2023"). Typical applications of AI in the finance sector include [fraud prevention](https://www.financedigest.com/payroll-fraud-and-how-to-prevent-it.html "Payroll fraud and how to prevent it"), quantifying and assessing risks, and analysing economic trends and data. [Conversational AI is changing how financial institutions engage](https://www.financedigest.com/how-conversational-commerce-can-help-banks-engage-with-millennials.html "How conversational commerce can help banks engage with Millennials") with their consumers by being more convenient and frictionless. It enables [digital transformation](https://www.financedigest.com/5-key-takeaways-from-the-finance-sectors-digital-transformation-revolution.html "5 Key Takeaways From the Finance Sector’s Digital Transformation Revolution") more effectively. As per a recent survey, about 90% of the [banking sector’s interactions are going to be automated](https://www.financedigest.com/banking-on-snow-automation-platform-for-success.html "Banking on Snow Automation Platform for Success") by 2023. To stay competitive in the industry, organisations have to rethink their strategies for improved customer experience. Financial institutions are cognisant that conversational AI can help them to be prepared and meet the [rising demands and expectations](https://www.financedigest.com/german-industrial-orders-rise-more-than-expected-in-february.html "German industrial orders rise more than expected in February") of their customers. 2. **Digital [Money and the Rise and Popularity of Finance](https://www.financedigest.com/student-finances-exposed-how-do-they-really-spend-their-money.html "Student finances exposed: How do they really spend their money?") Apps** Facilitating this new wave of digital money are [mobile payment](https://www.financedigest.com/what-is-the-optimum-mobile-payment-mix.html "What is the optimum mobile payment mix?") apps and so-called “digital wallets” – typically app-based services that allow users to pay for things (for example, via contactless payments) and transfer money to others. With the ever-increasing use of contactless payments and payments via apps, such as Apply Pay, Google Pay, etc., we could see paper money disappearing altogether. It is also interesting to note that most, if not all, digital wallet apps and [services are provided not by mainstream banks but by technology](https://www.financedigest.com/how-financial-services-companies-can-successfully-utilise-low-code-and-no-code-technologies.html "How financial services companies can successfully utilise low-code and no-code technologies") giants like Apple, Google, Samsung and Paypal to name a few. With their financial muscle and deep investments in AI, these technology giants are threatening to break the traditional hold of [banks and financial institutions over money](https://www.financedigest.com/marketmind-banks-are-leaking-money.html "Marketmind: Banks are leaking money") and payment services. Apple and Google are also considering a move into the unsecured lending market, making use of the buy-now-pay-later [digital payment](https://www.financedigest.com/italys-nexi-signs-digital-payments-deal-with-tims-olivetti.html "Italy’s Nexi signs digital payments deal with TIM’s Olivetti") system to attract millennials. This further threatens the stronghold of [banks in this service](https://www.financedigest.com/axion-swiss-bank-and-avaloq-sign-long-term-contract-for-bpo-services.html "Axion Swiss Bank and Avaloq sign long-term contract for BPO services") area. 3. **The [Financial Services](https://www.financedigest.com/4-ways-high-performance-analytics-powers-financial-services.html "4 ways high-performance analytics powers financial services") Industry Embraces Blockchain** Until recently, blockchain technology has been synonymous with cryptocurrency. According to Josh Howarth, a [financial trends](https://www.financedigest.com/2016-financial-recruitment-trends.html "2016 FINANCIAL RECRUITMENT TRENDS") expert in San Francisco, California, technology will now become more integrated with existing financial systems. For example, using blockchain would allow banks to perform cheaper, more efficient transactions while maintaining tight security. It can also be used to handle peer-to-peer lending, an industry that could [see a growth](https://www.financedigest.com/swedish-match-continues-to-see-strong-smoke-free-sales-growth.html "Swedish Match continues to see strong smoke-free sales growth") of up to $150 billion by 2025. This view is supported by most [finance and technology](https://www.financedigest.com/the-benefits-of-adopting-cloud-technology-in-the-finance-industry.html "The benefits of adopting cloud technology in the finance industry") experts. More banks are moving to cloud-based banking and blockchain will no [doubt play a role](https://www.financedigest.com/inflation-fighting-central-bankers-air-climate-role-doubts.html "Inflation fighting central bankers air climate role doubts") in this. HSBC and Wells Fargo already use blockchain technology to settle [forex trades; Paypal, Mastercard, and JP Morgan all allow users to make payments on their networks using blockchain currencies](https://www.financedigest.com/how-to-trade-forex-and-succeed-as-an-individual.html "How to Trade Forex and Succeed as an Individual"). This involves cryptocurrency, of course, but it shows [banks’ willingness to embrace](https://www.financedigest.com/rethinking-retail-banking-embracing-a-customer-centricvalue-proposition.html "Rethinking retail banking: Embracing a customer-centricvalue proposition") blockchain. It’s not just banks incorporating blockchain, either. AXA, the French multinational insurance company, uses blockchain technology when insuring clients against flight delays. An Ethereum blockchain then connects both the [insurance contract and air traffic data](https://www.financedigest.com/aon-data-empowers-unica-to-offer-flood-insurance-for-5-2bn-canadian-peril.html "Aon data empowers Unica to offer flood insurance for .2bn Canadian peril"). As soon as a flight is over two hours late, the system takes notice and automatically triggers the insurance payout. 4. **Cybersecurity will be even more crucial than before** The digitisation of the [financial services industry](https://www.financedigest.com/73-of-employees-in-the-banking-and-financial-services-industries-are-looking-for-better-physical-and-mental-wellbeing-support-in-the-workplace.html "73% of employees in the banking and financial services industries are looking for better physical and mental wellbeing support in the workplace") will inevitably put an even greater focus on the role, scope and importance of cybersecurity. The bigger the scale of digitisation in [banking and financial](https://www.financedigest.com/why-banks-could-stand-to-learn-a-thing-or-two-about-financial-inclusion-from-fintechs.html "Why banks could stand to learn a thing or two about financial inclusion from fintechs") services, the more windows of opportunity cyber-criminals will have to strike. The [fintech industry](https://www.financedigest.com/2022-the-year-that-facial-recognition-will-lead-the-fintech-industry.html "2022 – The year that facial recognition will lead the fintech industry") is already responding and developing tougher cryptography to keep hackers at bay. Banks and financial services institutions will have to [invest large sums of money to upgrade their cybersecurity](https://www.financedigest.com/large-investment-success-for-basingstoke-cybersecurity-start-up.html "Large investment success for Basingstoke cybersecurity start-up") systems. 5. **Greater focus on customer experience** Over the last few years, the financial services [industry has shifted to putting consumers](https://www.financedigest.com/navigating-consumer-data-in-the-finance-industry.html "NAVIGATING CONSUMER DATA IN THE FINANCE INDUSTRY") first. Today’s [consumers are liberated with a broad range of services and products and a newfound sense of power over their spending](https://www.financedigest.com/50-of-consumers-wont-spend-more-than-20-minutes-applying-for-financial-products-online.html "50% of consumers won’t spend more than 20 minutes applying for financial products online") habits. With a rise in card-linked rewards, personalised loyalty programs, buy-now-pay-later solutions and more, consumers have more choices over how and when their money is spent. Banks and [fintechs are needing to constantly evolve their offerings in order to meet](https://www.financedigest.com/fintech-incubation-more-value-than-meets-the-eye.html "FINTECH INCUBATION: MORE VALUE THAN MEETS THE EYE") customers’ demands, and this trend will continue well into the future of banking — making end-users the real winners. The power has shifted to consumers, and it isn’t going away anytime soon. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---