The world is evolving! Financial operations and transactions are increasing day by day! The value of money is multiplying! Yes, there’s an enormous amount of economic / financial transactions going on everyday in today’s world. The industry has so many players that it’s hard to handle them. The Finance and Technology are coming together here. Technology solves problems encountered by finance and finance manages technology development. Thus, finance and technology are growing symbiotically.
The development of one contributes to and depends on the development of another. It’s not wrong to say that growth in finance would have been what it is today without the growth of technology and vice versa.
Some advantages of technology in finance sector
- Rate of approval: Alternative lenders those who are involved in technology are used by small business ventures. It speeds up the approval rate of finance and increase accessibility. The process of application and time to receive the capital can be completed within 24 hours in many situations.
- Efficient advice: A very quick and economic option to get essential information about investment is robo-advice. Many of the latest systems rely on it. It is a great option to limit a person’s exposure to risk.
- Better payment systems: Issuing invoices and collecting payment can be made accurate and efficient by this type of technology. Also, by providing such professional service customer relations can be improved.
- Greater convenience: A good use of mobile connectivity can efficiently increase the number of people who can access this type of service. It can also make the transaction convenient and develop a better customer experience.
- Advance security: Biometric data, encryption and tokenization are the few of the latest security options used in finance sector. The use of these options may result in a major investment in security to ensure that the data of the customer is safe.
The involvement of technology in Finance looks like a fantasy story from a micro- view. There is a lot of hard work to create an IT system that can replicate what was previously manual. The most critical aspect is that very high accuracy has achieved. When the technology comes in, all manual interventions have removed. And this is not simple to accomplish.
Whenever a current method or process automates. The IT person must consider the complete economic process. Then the IT guy understands it, writes a program or modifies existing software as required. Then gives it to the finance guy. If the finance man is happy with what he has don. He begins to use it and hopes to increase overall efficiency.
But sometimes during the above phase there are certain elements that has missed. It requires the finance person to understand that sometime. Either incorrect calculations, client complaints, production anomaly or even a fraud may be the reason.
Such misses can have small to large effects and can sometimes cause the organisation enormous losses. This has lately been the situation where the absence of inclusion of two IT systems has resulted in a large bank being the victim.
Finance is such a sector where the margin for error is very small. Small mistakes or calculations can result in enormous losses. Another example may be the Finance guy entering erroneous values such as currency rates while using the IT system.
If the currency rate was 64 for 100 million USD with INR and the person enters 46 by mistake, you can imagine the possible losses. Another instance can be password sharing among peers. Which is also prevalent practice in locations where individuals are unaware of the dangers of such acts.
There is no doubt that technology has made economic transactions simpler to carry out. By clicking a button, banking transactions can be carried out via laptops or mobile phones. But one must be highly cautious as these systems can be vulnerable at times as well.
Banks and financial institutions are therefore investing heavily in data protection and privacy. Further constantly upgrading their systems to improve customer wealth safety.
Therefore, it is appropriate to believe that IT gives effectiveness in the financial world. The financial world needs to take IT that is completely precise and then use it with its greatest judgment and ability. Otherwise the implications may be un-surmountable and disastrous.