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TITLE: THE USE OF TECHNOLOGY IN FINANCIAL SERVICES-FINTECHABSTRACTThis paper focuses on the relationship between technology and change, both past and future, in the financial service industry. Technology in today’s modern environment plays a major role in all aspects of society, with widespread use in a majority of industry and business sectors. In today’s global economy many industries have to invest heavily in Information technology in order to keep its competitive advantage and to ensure they will be able to compete with competitors who now operate within a global economy. It can be said that there is an established trend within the financial services sector of increasingly heavy dependence on technology for delivering services and that this will continue in the future. The reliance on technology comes from the enablement, as a result of its use, to provide services and process tasks which would not otherwise be provided. The financial service industry could not provide the level of service it does without the support of advanced information processing and telecommunication technologies. The numbers of checks (over 37 billion annually), credit card drafts (over 3.5 billion annually), and securities trades (over 30 billion shares traded annually) would swamp any manual system that tried to handle them.KEYWORDS: FINTECH ,FINANCE ,TECHNOLOGY,BANKING, COLLABORATION, SCIENCEINTRODUCTIONFinancial technology (Fintech) is used to describe new tech that seeks to improve and automate the delivery and use of financial services. ???At its core, fintech is utilized to help companies, business owners?and consumers better manage their financial operations, processes, and lives by utilizing specialized software and algorithms that are used on?computers and, increasingly, smartphones. Fintech, the word, is a combination of "financial technology".?When fintech?emerged in the 21st?Century, the term was?initially applied to the technology employed at the back-end systems of established?financial institutions. ?Since then, however, there has been a shift to more consumer-oriented services?and therefore a more consumer-oriented definition. Fintech now includes different sectors and industries such as education, retail banking, fundraising and nonprofit, and investment management to name a few. Fintech?also includes?the development and use of crypto-currencies?such as?bitcoin. That segment of fintech?may see the most headlines, the big money still lies in the traditional global?banking?industry and its multi-trillion-dollar?market capitalization.Fintech?now describes a variety of financial activities, such as?money transfers, depositing a check with your smartphone, bypassing a bank branch to apply for credit, raising?money for a business startup, or managing?your investments,?generally without the assistance of a person. According to EY's?2017 Fintech Adoption Index, one-third of consumers utilize at least two or more fintech services and those consumers are also increasingly aware of fintech as a part of their daily lives.Handling a vast amount of data and number manually is very time consuming as well as tiring. For financial activities to take place effectively information must flow at a fast rate and this is where IT comes in to provide a solution. One of the key functions of information technology is?faster flow of information. For example, technology allows companies to link up their various departments under a centralized database. Once an information is uploaded by any departments it gets shared throughout the company. Unlike before when checks and checking accounts were used, information technology is speeding up transactions. Debit card and credit cards are allowing instant purchase without the need of banks to interfere. Along with financial activities, technology is increasing the customer base of financial companies. IT has made personal finance easier since banks these days provide information on savings and deposit accounts as well as online withdrawals. Starting from customers to banks, everyone can store their own transaction record in their accounting system. ?Social media plays a major role in providing financial industries with information regarding what their customers need and want. Companies in the financial industries associate their products in the online communities to receive feedback, encourage brand loyalty and to attract the young generation who are the future customers. Information technology has introduced various new financial products among which the most successful one is mobile banking.?Out of the 6.9 billion people on earth, only 30% use have bank accounts while 75% carry a mobile phone. Mobile banking has increased the financial activities by a great number.Technology with a Purpose: The Next Generation TodayTradingFinancial trading is enhanced with information technology. Some computer systems even trade for the users. A system is programmed to enter buy and sell orders when the price of a stock or bond reaches a certain level, and automatically closes the order when the target price or the stop-loss is reached. Computer based trading is useful when a trader has a system that allows profitable trading and does not want to enter each order individually. Information technology provides instant information for stock traders to make decisions, and allows them to enter orders that are immediately executed.ReportingFinancial reports are also improved with information technology. The language known as XBRL, or Extensible Business Reporting Language, is used to standardize the financial information in public companies' annual reports. Traders can quickly sort through records in this format. They can easily find the statistical data they need to determine which companies to invest in.FunctionFinancial data can be easily transferred with information technology. Instead of using checks and checking accounts, information technology can clear a transaction instantly. A debit or credit card purchase is rapidly compared with the user's account balance, allowing a bank to decide whether to allow a transaction. Information technology allows transactions during weekends and holidays, when there is no staff working at the bank.ConveniencePersonal finance is simplified using information technology. Banks provide data on checking and savings deposits and withdrawals in standardized formats. A customer can download account transactions and store them in records on a home computer. Personal finance software includes additional features, such as charts and reports, that show home users what they are spending money on and where their funds are coming from.Budgeting and BookkeepingInformation technology is also helpful for companies that are considering financial transactions. Computer systems calculate and display the interest and principal of a loan, and estimate the returns on investment when the company borrows money to expand its operations. Companies can securely transfer data online, and the computer system records all transfers, which simplifies bookkeeping.Security in the financial sectorEverything in the financial sector needs to be secured in totality. This ranges from the data, mode of transaction and the processes involved. The sensitive nature of these transactions needs high security. This requires complex software and firewalls to ensure that the processes are seamless and free from external interferences. The advancement in the latest technology has offered competitive edge services that have enabled a legitimate and robust system.Collaboration Many organizations take advantage of collaborative effort across departments, the concept of each department benefiting from other departments' expertise. The finance team acts as inhouse consultants to other departments within the organization. When all departments use a centralized Information Technology system, it drops the barriers that formerly blocked the flow of information. The company now has a centralized database that all team members can access -- subject to certain security rules.POSITIVE OUTCOMES OF TECHNOLOGY ON FINANCIAL SERVICESProgressive financial services companies are on the lookout for new technologies to improve efficiency and speed of service, as well as provide better?customer experience. Exponential growth in information technology has prompted companies to leverage digitization of banking technology to transform the financial services industry through customer experience management.The financial services industry is looking at improving online customer service enabled by competition with consumer brands like Amazon, Facebook, and Google. Importantly, most financial services executives feel improving the customer experience to be the top driver of digitization in banking.The advent of smart analytics allows financial services companies to mine the wealth of consumer data to understand and service customers better. Technology has also helped organizations develop innovative financial services. The development of better payment systems is a key challenge for organizations. There is also the possibility that?robo-advisory?will be a significant application in the future. Similarly,?blockchain-based services will gain in popularity in the coming years.A properly designed computer program does not make any mistakes, and its computations (not its inputs) are free from human error. This means that a calculation done by a computer program (like Excel) will always be accurate and trustworthy. Finance Packages like Tally give you up-to-date tallied Balance Sheet at any point in time. Unless the coding or the inputs are wrong, there is no chance a program can produce inaccurate data.Digitization of financial services is an ongoing revolution. Enterprises have the choice of making innovation the focus of a stand-alone organization or they may integrate it throughout their organization. This demand “great engineering.” Firms will do well to have a full stack of engineers who can introduce dynamism to deal with innovation while adopting a start-up approach.Financial services organizations can tap the potential of the?cloud?to make processes more transparent and collaboration easier.NEGATIVE EFFECTS OF TECHNOLOGY ON FINANCIAL SERVICES?Competition: Technology moves very quickly, constantly evolving and creating new devices and faster systems. Businesses note these changes and attempt to move with technology, adapting it to their present and future needs while also keeping a wary eye on the technology competitors are using. The end result is an increase in the evolution of technology and its application to business, a process by which everyone benefits. Expensive to buy Software Licenses & Out of life hardware no AMC within a short period of time. Training employees cost on new modules prove expensive.Confusion: While technology is useful, its fast pace and complex systems can be confusing. If companies want to update their systems or change the type of technology they use, they have to retrain not only employees, but often customers. New employees must also be trained in using business systems, which can create confusion. Distorted facts are possible with such a plethora of information. Investors looking for information may find the wrong information or information that has been cooked, changed, or distorted in the corporations’ favor. Also, the more information there is out there, the harder it is to find the information you need because you have to trudge through all the excessive informationAvailability: Technology is very available, meaning that it is easy for competitors of all sizes to use and learn. This makes it difficult for businesses to keep up with technological changes and vastly increases the number of competitors in their market as smaller business can use technology to offer value to a wider range of consumersCrime: Technology also increases the possibility of crime. A techsavvy employee can embezzle funds and make it difficult for the company to trace. Hackers can access personal and financial data of customers who trust the company to keep their information safe. Businesses must spend time and money developing safeguards against these eventsCONCLUSION:The stage is set for an exciting era of innovation as increasingly powerful and sophisticated technology becomes intertwined in the DNA of the financial services industry. It is this continuing convergence of advanced business processes and technology that is steadily moving us closer to achieving the true, seamless integration of information, tools and front-office capabilities. This phenomenon has the potential for significant impact in the financial services industry. Not only will it help facilitate the full spectrum of risk and return management, but it promises to fundamentally change the way investment decisions are considered and made. Indeed, we are nearing the day when this increasingly powerful technology, properly and efficiently deployed, will be able to provide institutional investors with an unprecedented level of awareness of their business environments, helping to better inform their decision making processes and empower them to manage risks and optimize returns in ways simply not possible in the past. The role of technology and innovation in the financial services industry is evolving more quickly and with greater potential impact than ever before. For service providers and the client they serve, the potential benefits are numerous, and include the promises of more informed, holistic decision-making, more powerful predictive capabilities and enhanced risk and compliance frameworks in which to operate. As our industry continues to embrace and incorporate these amazing technological advances, we are able to extract more intelligence and potential value from raw data today than ever before. This trend is certain to continue going forward. And, in addition to helping market participants to grow their respective businesses and portfolios, this evolution of technology in the financial services industry will help lead to increased transparency and openness, protecting the best interests of the respective market players, their clients and the economies from which they operate. While there are clearly some compelling business advantages associated with this enhanced role of technology and innovation in the financial services industry, there are also a number of obligations. Going forward, industry participants will need to respond to the numerous challenges presented by the rapidly changing regulatory environment we’ve witnessed since the global financial crisis. The regulatory landscape continues to evolve and the number of parties interacting with one another continues to increase. All the while, providers are expected to react more quickly, continue to create new functions and features, and seamlessly integrate those new features with the rest of their service offerings.To ensure ongoing compliance with this new and constantly evolving set of rules, providers will need to be able to quickly and efficiently retrofit their technology platforms to suit these newly introduced regulatory conventions. Coping with the challenges associated with a regulatory landscape in a state of constant flux will be a key challenge facing the financial services industry going forward, but it, too, is a challenge that can be overcome through the strategic application of technology.REFRENCES ................
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