Technology is altering the way the finance industry works. Information communication technology has cut across all aspects of modern day activities. It has also increased and renovated financial structure both in quality and quantity. Finance today relies heavily on technology. What is at stake here is the human element. It therefore presents some opportunities and also challenges.
· Customer Service
A good customer service team was vital in any company involved in finance. With advancements in ICT especially the development of artificial intelligence, chat bots are used to sort out problems and provide assistance to people.
· Online Banking
Banking used to be done in a non virtual world. People used to go to a brick and mortar building to transact i.e. withdraw money and transfer funds from one place to another. With advancements in ICT, these banking transactions can be done on phone, a tablet or a laptop. A person transacts with just the touch of a button.
· Fraud detection
Investigation and detection of fraud used to be an equal effort from both man and machine. Finance professionals used to be heavily involved in the identification and detection of fraud particularly as fraud analysts or forensic accountants. Advancements in ICT has made it possible for artificial intelligence technology to be used to detect, identify and track fraudulent activities at a much higher pace than humans could do. The machines track trough the history of the victim and then calculate or predict the likelihood of fraud based on previous patterns.
· Global Financing
ICT allows finance to operate at a global level. It allows companies to consistently acquire information at the same pace and time as their competitors therefore boosting competition in the finance industry.
· Social media
Companies today through their finance departments are harnessing the power of social media to be able to connect to their customers. This ensures they are in contact with customer needs and are in line with product or service innovations based on their future needs,
· Secure payment systems
With technology advances, the finance professionals benefit from access to secure payment systems that speed up their work. The clients or suppliers do not need to be close by to make or receive payments. Examples are credit cards, online transfers such as SWIFT and RTGS.
· Access to vast amounts of data
Customer data is a central decision making factor for finance professionals. For example, the banking industry relies on credit scores before lending you money. The Credit Reference Bureau is able to provide this data at the push of a button therefore the bank does not need to call the listed referees to determine if a customer is credit worthy.
· Capital requirements
Finance professionals were tasked with looking for funding for companies. Due to ICT, companies that are able to connect buyers and consumers are able to grow their revenues exponentially on little capital. This could only be possible by advances in ICT. For example Jumia and Uber platforms.
· Increased collaborations
Finance professionals are collaborating with ICT professionals to come up with sophisticated ways to do business. For example, the emergence of new payment systems such as Pesalink and Jambopay.
· Computerized accounting systems
Finance professionals do not spend a lot of time inputting transactions because there is software specifically meant to handle that work. Instead, they are more involved in analysis in order to add value to the organization.
Technology is the great enabler but it also presents pervasive, high impact risks.
· Cyber Security
The financial services sector is exposed to rising threats from people who want to steal personal data. Intercept and amend communications, misappropriate assets for their own use or hold organizations at ransom.
· Clash between organization strategy and the ICT strategy
Finance professionals may focus more on being in line with budgeted expenditure that in the end they lose out on technology advances which may lead to obsolescence. This leads a company to start playing catch up.
· Technology vendor and third party risk
The software are mainly provided by third parties who may at times have conflicting interests with the company and they may sabotage operations making finance professionals lose vast amounts of data.
· IT program execution risk
For finance professionals to enjoy the full benefits of technology, they have to be able to learn how to use it. There may be challenges experienced when they do not know how to operate the programs.
· Reduced employment opportunities
Companies increasingly require a small number of people for the finance departments because of ICT development. They are majorly engaged in analysis of the processed data.
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