Why Digital Transformation is Essential for Finance Firms

Longji Vwamhi is a Development Operations engineer who has worked in various finance firms. A Fintech professional, he has many programming and engineering certifications to back up his skills.
Longji Vwamhi is passionate about the use of technology in finance and fintech firms. Longji believes that the digitalization of the finance sector is the future of the finance sector.

First, we should understand that technology has been around for a long time, and it has come to stay. So even if you are not tech-savvy, you’ll need some tech skills in the future. This is because every sector in the world is brushing up on its tech skills. They also integrate AI systems in their day-to-day operations. From banks to financial institutions, schools, and health centers, every sector now depends on technology to run efficiently. Very soon, the world will adjust to a world everything is digital.

Technology and Finance

Technology is now synonymous with finance word. When you go to the bank, you’d notice that they use high-tech finance equipment to attend to customers. The same goes for loan and investment institutions. These firms that offer financial services need technology to thrive and grow well.
In a nutshell, financial digital tools are essential and are already transforming the finance world. Therefore, it’s up to financial institutions to be prepared for a digital transformation that will occur soon. Otherwise, they might be left in the lurch.
However, this is easier said than done because there are a lot of issues involved in doing so.
They are:

Inadequate Funding

First is the issue of inadequate funding to get resources to prepare for the transformation. Many financial institutions are facing money issues due to the recent inflation. Longji believes that without money, there is no way they can buy the latest, expensive technology they need.

Lack of Skilled Workers

According to Longji Vwamhi, The second is the lack of workers that are skilled in Fintech tools. Financial firms compete with each other to provide the best services. This is a way to retain and attract more clients base. Hence, some of these firms feel the need to hire the best staff and adapt to any tech changes. The more they try to adapt, the more it poses a problem. For example, a firm hires some workers that are skilled in one programming language. After a year, they discover that a new and better programming language is out. The firm then realizes that the workers they employed the previous year don’t know the new language. The firm has two options; either hire new staff that has the new skills or have the old staff learn the new skills. Either way, it takes time and resources to adapt to a new and evolved technology.

Privacy Concerns

The other issue is the privacy concern clients have over the use of AI systems by Fintech firms. There have been complaints about how Fintech firms use their systems to invade clients’ privacies. Similarly, the use of technology in finance has given room for cybercriminals to commit cyber financial crimes.

This is why the government has set up a commission to monitor the use of AI in the finance sector. It has ordered the Commission to write down laws that might properly monitor the applications of AI. The Commission will also include how to use AI legally and efficiently with other methods to curb online crimes. Furthermore, the government has tasked lawmakers to focus on how to develop laws that will monitor AI applications. The aim of enacting this law would be to protect the clients of financial institutions.

The complexity of The Technology

On the other hand, some firms that have prepared for the transformation use outdated technologies. They are hesitant to update their tech tools because the tools are complex to learn. Hence, many innovators have developed simple, but highly efficient Fintech tools that are easy to use.
In addition, Fintech developers have created simple tools to provide solutions to complex financial problems.

Role of Technology in Financial Institutions

As stated earlier, financial institutions can’t operate without technology nowadays. Therefore, every firm is trying to prepare to adapt and adopt modern tech tools into their business operations.

For example, some banks use storage technology like Edge to store their data.
This is because the number of people that use phones with internet connections keeps growing daily. Banks have lots of clients, so the amount of data that is generated keeps increasing. Therefore, there is an increasing need to process this growing data. So, it is imperative to develop technology and tools like the edge that will meet this demand.
Furthermore, banks have adopted internet banking, mobile app banking, and the use of USSD banking. These have improved the speed, efficiency, and reliability of their services. Banks now use software tools to keep track of their businesses, do accounting tasks, and secure accounts.

Another way technology is useful in the finance world is the use of Fintech tools by investment banks. Investment companies use Fintech tools to create a platform for their clients and investors. Traders can also register and trade on these platforms with ease.

Conclusion

Many clients prefer financial institutions that use advanced tech tools that make it easy to access financial services.
According to Longji Vwamhi, firms that refuse to do this and change with the times will lose their customers. This is because modern customers are digitally empowered and autonomous. The only way to satisfy their needs is to have a well-developed fintech system in place.
Finally, financial firms should integrate their mobile apps with many functions that will help their businesses and their clients.