Technological Innovation in the Finance Industry
The digital age is the fourth industrial revolution, each of which has impacted the financial industry in ways that were previously unanticipated, even unimaginable. Financial technology, also known as “fintech,” is intended to automate use and delivery of financial services with an eye toward improving the customer experience.
Fintech initially referred primarily to back-end innovations geared toward the service providers themselves. However, within the last couple decades during which the term has been in use, a reversal of sorts has taken place. Fintech now refers more often to services that are customer-oriented. This trend seems to be driven primarily by tech-savvy millennials who demand more control over financial services and wealth management, similar to what they get from online retailers.
However, it is not only serving customers’ needs and improving their experience that is driving the fintech revolution. It is also a need to protect customers’ financial information and personal data from online thieves. Hackers go where the money is, and financial institutions are often playing defense against online financial fraud.
To stay competitive in a changing market, those in the field of financial services may have no choice but to embrace new fintech innovations. TechWaste Recycling can help you make the transition with secure data destruction that ensures your customers’ sensitive information remains safe and secure. From banking and credit card companies to brokerages and asset managers, the need for new tech is ever rising and the need to dispose of old tech ever growing.
Credit Card Companies
Undoubtedly, the biggest technological innovation in the credit card industry within the last ten years has been the widespread implementation of EMV chip technology. Ironically, however, this technology isn’t really that new at all. EMV chip cards have been common in Europe for nearly 30 years. However, the technology has been slow to catch on in the United States, mostly due to the cost of incorporating it into existing systems.
Nevertheless, EMV implementation gained momentum within the last five years to stem the rising tide of credit card fraud in the United States. The magnetic strip technology used to store data on cards was a technological relic of the 1960s. The information was easy to steal and duplicate because it was static and never changed. This made card holders in the United States an easy target for international fraudsters and hackers who purposely bypassed countries in which EMV cards were prevalent. In 2013, credit card fraud in the United States increased by 12.5% over the previous year, resulting in a $5.3 billion loss. Not only that, but high-profile data breaches seriously damaged the reputation of affected retailers and financial institutions.
EMV cards do not safeguard against breaches, nor do they prevent all types of credit card fraud. However, they do make credit card information much harder to steal. They work by encrypting financial information and storing it on the EMV computer chip embedded in the card. When the card is inserted into a machine with a chip reader, the two components work together to create a unique encrypted code for every transaction. Access to this code doesn’t help an online thief; it is useless once the transaction is complete.
EMV compatibility is not required, but institutions that do not adopt the new technology may be liable for any fraud that results. Implementing the new technology means disposing of old card readers without EMV compatibility. TechWaste Recycling can help you dispose of the old credit card machines safely, securely, and conveniently.
Mortgage Brokerage
Increasingly, what tech-savvy customers want from mortgage lenders is a completely digital experience with transactions that can be conducted entirely online. Some lenders may feel threatened by this new wave of digitization, but it can actually offer benefits to you as well as your customers. Here are some examples of the positive effects fintech can have on mortgage lenders:
- Lower default rates for purchase loans and refinances by 38% and 29%, respectively
- Faster mortgage closings by 20%
- Increased market share
Additionally, during periods of high mortgage demand, lenders who provide a completely automated mortgage experience see their capacity constraints alleviated.
Of course, a completely automated lending experience also means more customer information stored electronically. TechWaste Recycling offers multiple levels of secure data destruction, as well as secure document destruction, to prevent your customers’ information from falling into the wrong hands.
Asset Management
Though professionals in the field of asset management may feel that fintech represents a “disruption” to the industry, innovations like machine learning and artificial intelligence allow managers to analyze and store data more quickly and efficiently. Mobile access and automated services allow customers to handle simple matters on their own, which helps you reduce costs while supporting your customers in their quest for greater independence.
Banks and ATMs
Drive-up banking and automatic teller machines have a much longer history than many people realize. The former was first introduced to the United States in the 1930s, while the latter has been in widespread use since the 1970s. However, the rise of online mobile banking has also led to a decline in ATM use as many customers can handle these transactions with their smartphones. As a result, many automatic teller machines must be decommissioned before they outlive their useful lives. TechWaste partners with banking institutions and ATM manufacturers from across the country to decommission old ATMs and banking electronics.
Brave New World
Professionals in the finance industry may understandably feel some concern over the rise of artificial intelligence, machine learning, natural language processing, and other technological innovations. However, the apprehension is largely unfounded. These innovations are not intended to eradicate established methods of conducting business in the finance industry but to augment them. There will always be a need for human guidance in banking and finance, and fintech can help you provide it more efficiently. Let TechWaste Recycling help you make the first steps easier with secure, responsible electronics recycling and data destruction.