The role of technology companies in the financial services industry

Comillas SFF

“The insurance sector is undergoing a deep transformation process. A sector that has historically been characterised by its traditional processes is experiencing a digital explosion thanks to Insurtechs and the growing funding they are receiving. 

From the first Insurtechs that appeared in 2016 to the present day, the added value of these companies has increased 5-fold. There are several projects that are already operating with optimal results, such as the application of blockchain technology to reinsurance contracts, as well as the use of artificial intelligence to detect fraud. 

Today we cannot say that disruption in the insurance sector has arrived, but the availability of technologies such as artificial intelligence, big data, blockchain, machine learning and the new generation of 5G connectivity will allow our sector to experience a real explosion of innovation over the next few years that will benefit customers. Are we ready for what is to come?”

Comillas SFF

What is next?

“The fact the technology sector plays a fundamental role in the growth of our economy and, more especially, of the digital world is nothing new.

2020 was an unprecedented year. We were permanently connected, with digital conventions, virtual online events, drones helping the police to maintain social distancing … Of course, companies and people successfully passed the digital stress test but, most importantly, we showed we were flexible enough to adapt quickly.

So, what’s next?

In 1923, Henry Ford said “real progress happens only when advantages of a new technology become available to everybody” and this remains true today. Think, for example, of platforms like Netflix, online shopping with a retailer like Amazon, Zoom, Uber, social networks like TikTok, or the way we communicate with our clients. Everything is totally mobile.

Without any doubt, the growth of digital technology is revolutionizing all sectors, including, of course, the banking sector. However, the difference with the past is not technological growth, but the speed and exponential form of this growth, and it is for this that we have to prepare.

In the case of banking, data will be one of the greatest assets, allowing it to offer its clients personalized services and gain competitiveness. Thanks to this, we will see more and more banks involved in offering intermediary services for their clients’ online purchases, while an application offers clients new discounts on other products that suit their tastes, habits or location. Banks will provide more services to companies through Cloud technology, with flexible credit lines, business plans, accounting platforms, and even the possibility of launching the next marketing campaign with just one click, as well as investment recommendations based on artificial intelligence.

It is true, that we cannot fully anticipate the companies of the future, nor would I say that this growth of the digital world is completely unpredictable. However, what we can say is that this is only the beginning of what we will see in artificial intelligence, upcoming alliances between banks and technology companies, and block chain technology, so we will continue to learn and innovate. As I said at the beginning, we can quickly adapt the resources and capacities of companies towards a more dynamic market with new consumer behaviours, and an increasingly digital world, that will undoubtedly help us to live better.

Finally, for this transformation to be a success, with social and technological responsibility, I would like to mention the fundamental role of regulators in this integration of banking with industry and end consumers, which is undoubtedly a challenge we face in all countries.

Now, that we are entering the holiday period, perhaps it’s time to be offline for a while, and enjoy nature, so that our lives are more sustainable in an increasingly digital world.

Happy summer everyone! ”

Comillas SFF

“Fintech companies are technology companies that offer financial products and services usually focused on a single product or service, with a customer/user orientation, providing transparency and cost effectiveness.

At BONACAPITAL we offer wealth management, administration and planning services and use the so-called roboadvisors fintech alternative, which best suits our offered services. We have analysed various roboadvisors’ functioning, and we have checked their usefulness basically in terms of a notable cost optimization, as well as online portfolio management optimization, even though it is more focused to small investors. It is indeed a very good alternative to the standard portfolio management services offered by the traditional banking sector.

Roboadvisors cannot achieve the level of personalized advice and financial planning required by wealthy families, which requires individualized attention by our independent and experienced advisors.

In the recent pandemic it has been observed that investors appreciated the advice of their “personal” advisers more than the standard letter published on the WEB of a roboadvisors.

In any case, we understand that Fintech products represent a revolution in the way of approaching the financial world. Alternative financing, Digital Payment systems, Neobanks and Challenger Banks and even Cryptocurrencies, can provide cost rationalization and transparency, although there is still a huge margin for their implementation to be sufficiently consistent.”

Comillas SFF

The innovative approach of Fintech companies in AML and Risk

“Over the last few years, we have seen a large number of Fintech companies flourish, mainly focused on the payments sector and on increasing their speed and versatility of options. A significant number of these companies have been integrated by large banking institutions and major financial players in the banking sector.

The emergence of these innovative solutions is leading in parallel to the development of efficient and fast AML services (KYC, Transaction monitoring, ODD) and, above all, data capture from the source of on-boarding to the follow-up of its activity, which allows us to implement very precise and high quality risk measurement tools.

In the same way, this digitalization and data recording process from the beginning of the customer relationship is generating an invaluable base of customer knowledge, which allows us to generate reports and obtain information on the trends of our customer portfolio, being able to anticipate their needs or products of their interest based on certain behavioral patterns and characteristics of previously selected services. 

Ultimately, the development of Fintech has brought with it the development of the AML sector, and has produced a huge reduction in the associated risks and an added value related to the better knowledge of our clients’ preferences in order to offer a more personalized service.”  

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