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Upgrading finance, a look to the future


by Tommaso Motta

Fintech trends: how tech is influencing Finance

The current financial landscape is experiencing a drastic digital transformation, which is creating development opportunities through new personalized services for users. Technologies are evolving and spreading very fast, opening new possibilities to collect, store and interpret data.

The term Fintech refers to the utilization of those innovative technologies to create successful financial products for increasingly demanding customers. Those products process the immense amount of data available to create information that can be used to support financial decisions. The article will analyze the main Fintech Trends that are transforming the finance industry.

What are the key Fintech trends?

There are financial areas in which technologies are more widespread than others. In the past decade, the cryptocurrency blockchain has become more and more effective in Fintech. It has proved that it can significantly speed up the transactions between banks through secure and dedicated servers. In the future, more developments and research will ensure that cryptocurrencies will be widely used in the financial industry.

Another great example of technology applied to finance are the many digital banking institution that came up in recent years. Those banks can offer services at a very low price, since they are very cost efficient, and satisfy their customers more effectively than their competitors that operates in a more traditional way. Even the way payments are due and received is changed thanks to the new technologies available. Mobile wallets, contactless cards and e-commerce payments are just some examples of how Fintech have simplified thinks for users, that now can send and receive money faster and safer.

Undoubtedly, the digitalization of financial institutions might concern the majority of consumers worried about their sensitive personal information. In fact, technology has proved not to be totally reliable in protecting user’s privacy. Many fintech companies are concerned about this problem and are investing to make their business “cybersecure”.

Right now, the focus of the new Fintech companies is shifting towards financial investment advice. Thanks to algorithms and artificial intelligence it is already possible to predict with a good degree of certainty the stock market trend in the short and long term. Technology now makes it possible to create virtual financial advisors that can give excellent support to investors at very reasonable prices. These consultants exploit the information obtained from algorithms and artificial intelligence to provide personalized support to their human interlocutors.

What benefits Fintech can give to the financial industry?

Fintech helps companies, business owners and consumers to better manage their financial operations, processes, and lives by adopting specialized software and algorithms. Fintech aims to two main categories of users:

1) B2B (Business to Business) for banks and businesses

2) B2C (Business to Consumer) for private consumers

Fintech companies, through their services, can help traditional banking institutions to carry out many activities digitally, reducing costs and increasing the ability to reach and satisfy customers. Nowadays, many online brokers that allow their clients to invest in the financial markets at a very affordable prices are popping up. For those new companies, the ability to predict market trends by processing data can represent a significant competitive advantage over rivals.

Even companies that do not make finance as their core business can benefits from Fintech. For businesses is crucial to have a good financial management to overcome competitors, and technology can simplify and speed up onerous but indispensable accounting activities. Regarding private consumers, Fintech companies are able to offer personalized advice on trading and investing. Thanks to software and artificial intelligence that predicts market trends from various and unrelated data, companies can give financial advice to different types of costumers with different different risk perception and tolerance.

What are FinScience’s solutions?

Among the numerous products proposed by fintech companies in the past years, FinScience’s solutions stand out.

FinScience Platform is a software that give information about financial markets and shows them through simplified dashboards. This software can discover new investments opportunities by analyzing huge amount of “Alternative Data”, through proprietary AI algorithms and human experience. Those kinds of products give information to generate investments ideas that nobody has, that is why many professional investors are staring to use them to boost investments performance.

Today, every organization acquires and produces considerable amount of information. To help companies to process that information, FinScience came up with a product calledKnowledge Discovery Machine” or KDM. Using algorithms and machine learning owned by FinScience, this software can easily convert documents into actionable classified data, eventually enriched with external content and Alternative Data.

As we said before, professional investors are now looking for new tools to operate and outperform the market. To meet the need of those investors, FinScience applied the artificial intelligence to the Quantamental Investing. This new methodology combines a quantitative (based on measurable and objective data) approach to investing with a fundamental one (based on subjective knowledge of the companies).