The financial software industry is growing as financial institutions continue to pursue digital transformation and bring new features to customers. With these upgrades, banks and other institutions are also showing customers that they are keeping up with the level of automation and convenience those customers seek. Such features require software to support them and professionals to help implement and maintain it.
Additionally, the financial regulation system requires that banks keep certain types of records, requiring different types of software. Further, as in many other industries, financial companies are taking advantage of new technologies to make smart decisions about new services, marketing programs, investments, and many other matters. Security is another area in which financial companies require robust software. Customers must be able to trust that their assets are safe.
In the sections below we take a closer look at what’s new in financial software, including more about the types of software used within the industry and the technology behind them.
Today’s Financial Industry
Like many other industries, the banking sector is facing pressure to adopt emerging technologies to outdo competitors and provide the level of convenience and security customers expect based on their relationships with firms in other sectors, such as retail. Based on that activity, customers are looking for ease, speed, personalization, and superior customer care.
Another driver is the need to optimize efficiency and maximize profit. Technologies like robotic process automation (RPA) and artificial intelligence (AI) along with machine learning (ML) are changing requirements for human workers by performing labor-intensive or repetitive tasks quickly, accurately, and efficiently, allowing humans to focus on higher-level functions.
Add to these factors another very important one. With technologies like blockchain and cryptocurrency, the nature of money itself is shifting. No longer a fringe pursuit, cryptocurrencies are gaining traction, and banks are using blockchain to offer new services and save on operating costs. The following video describes more about the likely future of money based on these and other innovations.
Given the impact of these emerging technologies, financial institutions must not only shift the way they operate, but also the story they tell about themselves to customers to a technology-first narrative. Doing so changes the perception of slow, stodgy organizations that are out of step with modern times to one of sleek, modern financial service powerhouses that can help customers pursue their financial and personal goals.
Software Used in Finance
Banks are introducing new features to serve current customers and attract new ones. To support those efforts, top financial software companies are creating products that enable a variety of tasks. So, what software do most banks use? Each firm must choose its own unique mix, but there are some categories that many banks and other financial institutions commonly deploy:
- Security software. Because they hold sensitive personal and financial information that cyber criminals value, financial institutions are victims of cybercrime at a much higher rate than other types of companies. Sensitive customer data is at risk of being exposed. And, as these attacks are incredibly costly in terms of money, time, and tarnished reputation, companies must continue to use robust applications to combat them.
- Online and mobile platforms. Depending on your age, you may remember when online and mobile banking didn’t exist, and all transactions required an in-person visit to the bank. Now it’s hard to imagine a financial institution that doesn’t enable performing most, if not all, transactions online.
Some companies in this sector don’t even have a physical location and require all transactions to be done electronically. The differentiator at this point is not whether a bank has online and mobile banking but how easy the interfaces are to use.
Given the ubiquity of mobile phones and laptop or desktop internet use, the more electronic options financial institutions can give customers, the better. They include the abilities to deposit and withdraw funds, check balances, move money from one account to another, analyze spending, and more. - Automated investment tools. Customers used to go in person to meet with their financial advisers. Now it is not uncommon to meet with them via video or phone conferences, which must be secure. Additionally, information sent in writing must use a secure portal to exchange messages back and forth.
Banks are even offering automated suggestions and investment advice based on predictive analytics to augment or replace human investment advisers. While many people still prefer a human-to-human relationship for investment advice, others are willing to trust automated investment insights that help them manage their money. - Chatbots. The time has passed when computer interfaces were so frustrating that customers almost always chose the “talk to a real person” option when faced with a bot on the other end of a phone line. Now these programs are much more sophisticated and less challenging to navigate. Therefore, companies can feel confident in using them more freely without losing customers’ good will as a result.
- Analysis tools. Big data, AI, and ML give financial institutions nearly endless options in terms of helping customers, increasing efficiency, finding and keeping customers, and making smart operational decisions.
- CRM systems. Banks and other companies in the financial industry know how important relationships with customers are. Therefore, software designed to manage those relationships is critical.
- Document management software. In addition to the many applications needed to enable customers to perform transactions, additional software is a must for companies to handle business internally. Such software includes document management systems to perform tasks like financial planning, accounting, and preparation of financial statements.
The Role of Financial Software Development Companies
Today’s financial software development companies take on enormous responsibility, as it is their products that support critical financial activity and engender trust between institutions and their customers. Software development companies must develop products that not only work efficiently and effectively as expected, but also provide a high level of security, an easy user interface, and the ability to grow as their customers—financial institutions—succeed.
