Cybersecurity has always been an edgy topic in the IT landscape.

With one network attack happening every 3 seconds, cybercrime is about to cost the global community some $6 trillion in 2021. 

That’s a staggering figure to think about, and a lot of damage for the digital crime victims in the form of operational costs, harmed reputation, and direct financial losses. Notably, the global protective measures expenditure this year makes up just 1% of the financial losses evoked by malicious online activities. 

Really, the subject of enterprise digital security can not be overestimated.

What are the main threats businesses should look out for, and how can they combat these issues realistically in today’s fast-paced digital environment? 

This article is going to shed some light on these questions. 

Cybersecurity threats to businesses

An old saying goes “Praemonitus, praemunitus”, which means forewarned is forearmed. 

*It is actually the motto of the US Army Security Agency, the British Royal Observer Corps, and the Australian Army Intelligence Corps – kind of a clue on the importance of knowing the dangers when we talk about security. 

As for the modern digital sphere, there are 6 main groups of threats for businesses to be aware of:

• Phishing 
• Ransomware 
• (D)DoS attacks
• POS malware 
• Insecure networks
• Modern technology

Let’s explore each.  

Phishing

Perhaps the leading cybersecurity threat for a long time already is “phishing” – a social engineering attack aimed to deploy malicious software or steal user data by deceiving the victim. 

This could be done through misleading links, fake digital personas, mirror websites, or even compromised pixel tracking. 

The idea is to earn the victim’s trust so they perform a voluntary action – something like clicking on a link, submitting credit card details, or downloading a file. This is why it’s called “phishing” – the target has to bite the hook in order to get caught. 

Phishing is to blame for as much as a third of all confirmed data tampering and nearly 80% of all cybercrime every year. 

Ransomware

A common type of software deployed through phishing is ransomware, which encrypts data and blocks access to infected devices demanding a ransom fee to unblock it.

This type of malware is very common and constantly growing in numbers, with some industries experiencing unprecedented levels of attacks in recent years. Like that, the global banking industry saw a baffling 1318% YoY rise in ransomware data breaches this year. 

With an average of 37% of organizations worldwide suffering from ransomware attacks in 2021, this 20 billion dollar question should be highlighted on every company’s cyber protection agenda. 

Denial of Service (DoS) attacks

Another way hackers disrupt digital platforms is through directed network attacks called DoS or DDoS – (Distributed) Denial-of-Service attacks.  

These attacks aim at making a web service unavailable by flooding the targeted system’s host with a superflux of requests. The server then becomes unresponsive, thus the “denial-of-service” term.

While there is no direct gain for hackers from a victim system’s stoppage, this tactic is used to blackmail or harm institutions operating on the web.

In fact, it is estimated that every third business in the US is targeted by a DDoS attack, legitimately rendering this web security threat our third critical issue. 

Point-of-Sale (PoS) malware

Another major digital security issue for businesses these days is Point-of-Sale malware. 

Since the main goal of most hackers is to steal funds, Point-of-Sale systems like ATMs, credit card terminals, and online checkouts make just a perfect target. These devices and functionalities process all sorts of customer data, including payment details, and are usually less protected than other system elements.    

A PoS can be compromised both through hardware (via remote data readers and transmitters) and software (dongles and trojan viruses) to steal and sell data or withdraw funds. 

Not exactly a new threat on the horizon, it has been determined that nearly half of PoS attacks targeted small businesses in 2015, with some breaches compromising millions of credit cardholders. 

Insecure networks

As the world is becoming remote-based, more and more people work outside of professionally protected environments – in home networks, through public Wi-Fi and 5G, and from mobile devices. 

This poses another major threat for companies and individuals as it makes it easier for hackers to intercept data, which can be especially harmful if logging into vital services, making payments, or operating sensitive data online. 

In fact, experts have already detected loopholes in 5G to WiFi data transmission and expect more vulnerabilities to surface.

Modern technology

Last but not least, businesses should look out for the threats posed by modern tech.

Technology is evolving rapidly, and so are the hackers’ approaches to abuse it. The problem is that very often, we have not yet determined effective preventive measures to combat innovation abuse. Just like with a regular virus or illness, it takes time to find the cure. 

In this regard, BlockChain, Cloud computing, IoT, and AI are some of the main technologies related to malicious online activities. 

Crypto & BlockChain 

Even though blockchain technology is supposed to provide a bulletproof network, the mere human factor along with environments in which distributed ledgers operate actually introduce loopholes for hackers to breach its security. 

People often assume that their crypto assets are impervious and forget to take the basic safety measures (like device and network security) seriously, paying dearly for it. 

Like that, it is estimated that a total of over $10 billion in bitcoin alone has been stolen since 2011 – pretty impressive for a “bulletproof” system.   

Cloud

Another group of vulnerabilities among modern tech comes with cloud technology, which is developed and adopted quicker than the associated security measures.

Just to give you a perspective, the number of companies suffering cloud attacks grew 5X times in the past year, reportedly losing over $6 million to these incidents.

Notably, it is estimated that nearly two-thirds of cloud breaches occur due to user error and could have been prevented, so professional support is definitely needed to ensure that your business is safe in the cloud.  

Internet of Things

Connected devices provide another pool of opportunities for hackers to invade people’s privacy. 

From fitness trackers and wireless medical devices to cars’ computers and smart home systems – we are increasingly reliant on the IoT devices that collect massive amounts of data and directly affect our daily lives. 

The problem is that these devices are usually less protected than systems and networks they are connected to, which provides additional entry points for hackers to abuse. So, there is no wonder why IoT attacks are increasingly frequent, with over 60,000 registered breaches just this year. 

Deep Fake

Deep fakes are powering a new type of cybercrime, with some research suggesting it’s about to become the most dangerous type of AI-related crime. 

Machine learning algorithms are now capable of indistinguishably simulating a person’s appearance and mimics from just a small batch of that person’s original photos. 

Needless to say, safety troubles mount when you can’t tell the real from fake, especially if we talk about faking government officials, business executives, or legal testimonies – the ways of abusing deep fakes are countless. 

Top industries for cyber attacks

Speaking about cyber threats, we need to understand that different industries and business types experience different amounts of digital crime.

Right now, we see healthcare, financial, and educational institutions, as well as SMBs across all other domains of activity under elevated pressure.

Let’s try to figure out why. 

Small and medium-sized businesses

First of all, most attackers choose an easy target over a difficult one. 

Having smaller overall budgets as compared to corporations, SMBs spend less on protective measures and thus are more susceptible to online crime. This is why small and medium-sized businesses get more attention from cybercriminals, accounting for as much as 43% of all attacks. 

Healthcare 

The rapid digitization of healthcare since Covid created another major target for online crime. 

To hackers, healthcare facilities represent a mixture of outdated IT systems, weaker cybersecurity measures, and a ton of valuable data like patients’ personal records and billing info. 

All this contributes to increased malice attention, with healthcare attacks doubling over the past couple of years – up to a point where over 93% of medical institutions worldwide suffered from digital crime.  

Notably, over a quarter of all cyberattacks in healthcare target connected (IoT) devices like defibrillators, pacemakers, neurostimulators, and insulin pumps. This is extremely concerning, to say the least, and can be devastating for both medical institutions and their patients alike. 

Financial institutions 

Another major target for hackers is the financial sector, mainly due to its innate relation to money. 

Here are some stats for you to consider: 

• Financial institutions are 300 times more likely to be attacked than any other business. 
• The industry was the most heavily pressured by hackers vertical market already in 2018, 
• and saw another 30% spike in online crime since the Covid began. 

And while financial institutions are generally more protected (as required by government regulations), the increased usage of online banking in unsafe environments or by untrained people really creates the loophole for hackers to infiltrate accounts and steal money or data. 

Education 

Last but not least, education is yet another industry suffering a massive spike (600%) in harmful online activity in 2021. 

This happens mainly due to the increase in online learning in recent years that comes along with using unsafe devices and vulnerable platforms, as well as unprepared cybersecurity staff in educational institutions. 

With 44% of educational institutions worldwide hit last year, schools mainly suffer from ransomware, adware, and spam. 

How To Protect Your Business From Cyber Attacks

Now that we’ve learned about the main security threats and industries under pressure, let’s figure out how to counter these issues proactively. 

All of the safety measures that institutions ought to take to protect their data, finances, and reputation can be classified into 5 groups: 

• Data,
• Equipment,
• Access, 
• Human factor,  
• and Case-specific measures.  

As usual, let’s explore them one by one. 

Data 

The first thing every business with at least one digital device in operation should check for security is data.

Information is pretty much our most precious, sensitive, and vulnerable asset. To protect it from harm, there are two simple steps: backup and encryption.  

Essentially, backup secures your data from being lost.

Backup functionalities are included in most data storage and management solutions, so you simply need to ensure that it’s properly set up and turned on, and prepare an extra storage space for the backup files. 

Encryption, on the other hand, protects data from being stolen. 

With encryption, you can secure specific files, entire disks, or the transferring data. 

To encrypt stored data, there are both in-built (Microsoft BitLocker, Apple FileVault, and Dm-crypt for Linux) and custom solutions (AxCrypt, VeraCrypt) to protect your stored data. In addition, many anti-malware solutions like Eset or Kaspersky include encryption functionalities in their features. 

And when it comes to encrypting transferring data, the easiest way to do it is through a VPN solution (in-built with most browsers) or router settings. 

Equipment

The second step to securing your business online is ensuring the safety of the devices you are using.

This comes down to: 

• Updating the software to get the latest security patches;
• Installing specialized security solutions with antivirus, anti-spyware and anti-spam filters;
• Setting up a firewall on all devices, including portable ones;
• Encrypting network data through a VPN or router settings (see previous paragraph).

And this doesn’t just touch on the in-office company equipment! 

Any device you or your staff use for business-related activities should undergo similar protective measures – whether it’s a home PC you sometimes work from, a laptop you travel with, or the smartphone you likely use for team communication. 

Access

Another security measure to protect your business from digital harm is to bulletproof account accesses.

The main way to do it is through using unique, complex passwords and passphrases, along with multi-factor authentication (MFA) to ensure that criminals won’t be able to access your system even if some of the devices or login credentials are compromised. 

Also, to protect these access details, using a private network or a VPN (virtual private network) in public ones is strongly recommended.  

Human factor

Apart from the purely technical preventive measures, it’s worthwhile to ensure that all members of your team and clients are informed and trained to operate safely in the digital environment.

In fact, it is estimated that as much as 95% of cybercrime is enabled by human error – through using insecure networks and devices, utilizing weak and repetitive passwords, opening hazardous links, downloading unverified files, etc. 

So, properly training your staff and clients to stay safe online is perhaps the best cybersecurity investment a business can make.  

Professional advice 

Last but not least, it’s worthwhile to take professional advice to protect your business. 

Hackers constantly find and invent new ways of harming businesses online, and traditional protective measures can not always prevent those attempts. Consulting with cybersecurity experts is the last, but very often the most effective measure a business can take to protect itself. 

Looking for professional cybersecurity advice? Fill out this short contact form and we’ll get back to you with a checklist of the best digital protective measures for your specific case!  

Navigating in a rapidly evolving world like ours is today requires one to be well aware of the top tech trends and skills that are driving the transformation in 2021 and creating the future. 

Doing this is extremely important although not easy. So, we’ve decided to do a thorough market analysis and compile our own list of the top ten tech skills in demand right now – for you to stay armed and informed in 2021. 

Time is money, so without taking any more of your time, here’s a brief overview of the 10 most relevant tech vectors to watch, learn, and invest in this year, according to MintyMint: 

*Listed in a free order 

AI & Machine Learning 

One of the main tech trends dominating modern history is automation, which is permeating every sphere of our lives. And algorithms play a key role in stepping it up even more and taking digitization to the next level. 

From healthcare and transportation to commerce, management, and leisure – digital intelligence is changing the world we live in. Robots are taking on more and more workloads. Self-driving cars are out in the streets, and virtual assistants are becoming increasingly human-like. Such a transformation requires a ton of AI/ML experts, making it this year’s #1 emerging job, according to LinkedIn’s annual report.  

As for the key skills in the arsenal of AI/ML specialists, we’re talking about a mixture of TensorFlow, Python, Java, R, and Natural Language Processing. 

Data Science

Data science is closely related and often an integral part of AI/ML tech. That said, the field is rather independent and big enough to give it a separate place on our list.  

In this regard, last year has shown how big data can affect global processes and help the international community respond to the challenges of the modern world by providing effective solutions. 

At that, businesses remain the main consumers of data science services. The demand for data specialists in the corporate sector has grown by almost a third since 2018, according to refnitiv.com.  

And given that next-gen tech relies heavily on effective data collection, processing, and analysis – it’s clear that data science in all forms is a crucial part of technological progress. 

Speaking of which…

IoT

Effective data collection and implementation of digital intelligence technologies require leveraging a mesh of connected smart devices woven into our daily activities on many levels. 

In this regard, the Internet of Things remains a highly relevant topic when it comes to technology and its development. 

At that, the focus of IoT development is shifting from nice-to-haves towards a more utilitarian range of application across essential spheres of human activity. We see increased integration of smart warehouses and automated tracking & shipping in transportation. Remote monitoring and care, wearables, and contact-tracing solutions are changing the game in the healthcare sector. And various production industries are adopting more and more smart factory equipment and machinery on site.   

As for raw numbers, the world’s IoT market is expected to surpass a $520 billion mark by the end of 2021, with an estimated 27 billion connected devices mesh – about 3.5 devices per person globally, according to a Cisco’s paper. 

Cloud computing

Naturally, all of the complex calculations associated with the above-mentioned processes require immense computing power to be processed. This brings us to another one of the top tech skills in 2021 – cloud computing.

Revolutionizing computer resource usage, cloud tech is gaining huge momentum due to the sheer convenience and unmatched performance it offers. 

Speaking about which, we have to mention AWS, Microsoft Azure, and Google Cloud Platform. The three largest cloud service providers on the market today, and yet another major force of the tech progress in 2021.

Just to give you some perspective, over 90% of all public companies in the world are using virtual tech, with 94% of all workloads being performed in the cloud this year, according to a HostingTribunal’s assessment.    

You do the math…

Cybersecurity

Now, operating that much of (often sensible) data in a place without physical barriers requires a decent level of security to protect the service consumers. The more information is stored and accessed online, the more vulnerable it becomes to all sorts of tampering and fraud. 

I this regard, after slightly shrinking in 2019/2020, global cybersecurity spendings have bounced back during the pandemic. And the market is not looking to slow down in the nearest future, according to threatpost.com’s conclusions. 

Therefore, it is safe to conclude that cybersecurity specialists are going to be in high demand throughout 2021. 

As for the top cybersecurity sub-niches, we’re seeing areas like authentication, cloud data protection, and application monitoring gain extra attention.    

Blockchain 

Speaking about secure digital structures…

While closely tied to safety online, Blockchain deserves a place of its own in the chart. That is, of course, because of the cryptocurrency boom that is happening right now. 

Although blockchain is not young, we can watch an actual crypto-revolution unfold right in front of our eyes. Like that, some of the leading international tech giants are beginning to invest in the technology, skyrocketing its value. 

With the price of Bitcoin soaring to quite shocking figures, the news about more and more businesses opening their doors to crypto operations leaves no doubt that blockchain experts will dominate the tech market’s talent demand in the nearest future.   

Mobile Development

On the consumer’s level, all of the above only makes sense when integrated with the one digital platform dominating user time and attention – mobile devices. 

With annual mobile app downloads estimated to reach $258 billion by 2022 (almost 50% growth in a 5-year time), the demand for mobile developers is one of the highest across the entire IT development spectrum, according to StackOverflow.  

Moreso, given the 5+ billion pool of unique smartphone users globally – mobile development will remain relevant in the foreseeable future. 

As for the niche technologies, cross-platform development tools (like React Native) are harnessing the highest $ per line of code. 

AR/VR

Looking at future tech and innovation, we must notice AR/VR as an essential means of bringing about the new realm. 

Last year’s health crisis has been a major outer force pushing tech transformation along the “all-remote” paradigm. This resulted in a genuine AR boom as its global market size exceeded $15 billion, according to marketsandmarkets.com data. 

Covid-related limitations have made consumer-centric industries look for virtual opportunities in communication, leisure, shopping, traveling, etc. – revising the traditional ways of conducting daily activities. 

That said, we’re seeing many less casual VR initiatives in the healthcare sector. Here, using augmented reality has already shown great results in staff training, surgery, general treatment, pediatrics, and many more niches. 

DevOps

Optimizing the development processes ensures successful implementation of nearly all of the other technologies on the list. Therefore, DevOps is going to continue to be highly relevant in 2021.  

In this regard, there is increased attention towards Infrastructure Automation, Application Release Orchestration, Application Performance Monitoring, and Cloud Management Platforms, along with a major focus on agility and adaptation to irregular objectives.   

Python

Last but not least on our chart, is today’s most in-demand coding language on the market – Python. 

The official AI/ML software backbone and probably the best choice for any data-related applications, it is definitely an essential skill to have in the arsenal in 2021.   

Now, it is true that JavaScript is almost as popular a coding language as Python, and is worth mentioning too. Nevertheless, the ratio of Python-based projects to the amount of talent available makes it a definite leader in the niche. 

There you have it – the 10 top tech skills in demand in 2021, according to MintyMint. 

Hope you enjoyed the article. Feel free to contact our team for any questions regarding software development or current tech trends. And most importantly – stay tuned in for new updates!  

As digital becomes mainstream, a collision of two worlds is unfolding: finance and technology. As the lines between them blur, fintech companies have to embrace digital transformations to stay competitive on the market and meet the challenges they are facing in 2020.

Financial institutions can launch digital-only products and services and eliminate a number of costly branches and field agents to improve customer experience. However, they still need to update their strategies, combining new data processing methods with advanced analytics and cybersecurity tools.

Finance and BigTech

One of the key challenges determining the destiny of fintech has always been constant competition.

In 2020, it gains even more influence as non-financial companies are entering the market, setting new standards. Titans of technological innovation are turning their attention to the financial sector, becoming the so-called BigTech. They bring a variety of app-related services, from banking to ride-sharing, built in a single app under one roof. 

Like that, Facebook created Facebook Pay and introduced its own cryptocurrency Libra to make global payments cheaper and faster. Apple has already presented a credit card, and Google plans to introduce consumer bank accounts later this year. Meanwhile, Amazon and Airbnb are partnering with JPMorgan to provide e-wallets. Uber is also moving further into finance with Uber Money and new financial products.

FaaS Benefits

All of them provide finance-as-a-service which has the following obvious benefits:

• APIs that allow to scale fast and open up multiple markets simultaneously;
• linking today’s tech-forward businesses with legacy financial systems that drive the majority of global commerce;
• unlocking a new playground for fintech innovators;
• delivering exceptional customer experiences for localized and cross-border commerce.

However, it doesn’t mean that these data-rich businesses have plans to become regulated financial institutions. Given the headache of getting and maintaining a banking license (which is also a big risk), they will mostly operate with licensed partners instead of switching to full-stack banking. In fact, they will probably just try to keep users hooked on the app to drive revenue. 

That said, BigTech has a massive pool of users whom they understand better than anyone else. This allows changing the competitive finance landscape, forcing traditional institutions to rethink the way they do business.

To keep up with BigTech and withstand the competition, financial companies need to focus on and meet the following challenges:

Challenge #1: Data breaches and cybersecurity

Sensitive data and interconnected systems with millions of transactions handled every day makes financial firms the primary targets for cybercrime. In fact, they and are hit 300x more than any other type of business, with one hacker attack happening every 39 seconds. So, fighting off cybercriminals is a daily task for the fintech industry.

IT security specialists from western companies provide worrying reports on the security of operations. In the past year alone, 48% of financial institutions were breached and 52% experienced a cyber attack or signs of suspicious behavior in their infrastructure.

Common threats.

It happens for a number of reasons:

1. Use of third-party solutions;
2. Rapidly evolving, sophisticated, and complex technologies;
3. Cross-border data exchange;
4. Increased use of mobile technologies, including the rapid growth of IoT;
5. Heightened cross-border information security threats.

By 2024, cybersecurity spending will increase by $224 billion. On average, one cyber-attack costs a financial institution $1.8 million. Notably, smaller companies experience the biggest losses (due to lower investment in IT security).

Meanwhile, a loss of data can not only result in negative repercussions for businesses of all sizes but even bankruptcy. In fact, 60% of them close operations within half a year after the cyber-attack. 

Solutions

This makes financial companies come up with the integration of innovative solutions to stay ahead of cybercriminals:

• Data encryption and data loss prevention solutions (encoding a message or information to be accessed by authorized parties only);
• End-to-end data protection (protecting data during transmission);
• Blockchain and distributed ledger technology (as it requires both a public and a private key);
• Endpoint Detection and Response (deployed on devices to provide continuous monitoring and automatic response to advanced threats).

Security should be built into all aspects of the business. So that when it evolves, the cybersecurity strategy can evolve along with it. With the digitalization of the industry, financial companies should be quick and agile to update existing systems. This will help to fight fraudulence, identity theft, espionage, money laundering, and avoid the lack of customers’ trust.

However, heavily invest in technology is not enough. Companies still have to train employees and customers on how to react in case of a cyber-attack. Another option is to hire ethical hackers to detect and fix loopholes in the system before real hackers jump in.

Challenge #2: Complying to regulations

As the fintech revolution goes on, companies have to operate between the financial and technology sectors. This makes them deal with many strict regulations. Therefore, customer concerns over sharing data with unknown third-parties become the main stumbling stone for financial services in 2020.

This is no bombshell, of course, and financial institutions are already well-equipped to stay compliant. At the same time, smaller companies often have fewer resources to meet all the data security and financial regulations, which creates certain risks. 

Introducing an innovative idea to the market and getting government sign-off is a highly time-consuming process. And expanding internationally opens up a whole can of additional regulations. One of the biggest rule changes for fintech became the 2018’s GDPR. Failing to comply, enterprises in the UK have already received fines totaling £300 million.

RegTech

The main goal of all these regulations is to boost innovation and competition, improve security, and provide customers with a wider range of financial products. As it’s nearly impossible for a human to keep up with, the so-called RegTech tools help financial companies standardize and automate compliance processes. These solutions are based on a bunch of technologies like AI, Blockchain, and Big Data Analytics. They can perform activities like:

• Real-time searching and reporting new or reviewed regulations;
• Analyzing the collected information and sharing its impact with the stakeholders;
• Updated data processing and validation;
• Ongoing tracking and monitoring;
• Predictive problem-solving;
• Robotics-automated workflow, regulatory and risk management. 

Leading banks like Deutsche Bank and JPMorgan spend over $1 billion yearly on regulatory compliance control. More so, 64% of small companies have already implemented RegTech tools to bridge the gap between authorities and the financial service market.

Flexible, easy-to-integrate, and cost-effective analytics tools developed by experienced dedicated technical teams allow financial institutions to identify non-compliant cases within the organization’s activities, compare scenarios, and predict potential full-scale market problems instead of resolving their consequences.

Challenge #3. Technology trends change

Being one of the most conservative industries, the financial sector faces many challenges and concerns in implementing new technologies.

2020 will see more adoption of Blockchain, AI, and Big Data in other industries. As for the fin sector, there is still not enough action in this direction. Just think about mobile banking apps, IoT-based insurance services, payment systems, AI-powered customer support digital assistants, and trading bots serving as high-tech advisory outlets. While many companies already understand that digital transformation is essential, some are still failing to achieve this. 

With the number of connected devices reaching 40Bn by 2022, financial institutions have to adopt a digital-first strategy in order to stay competitive. Investing more in AI, ML, robotics, and other workflow automation tools can help to increase efficiency and reduce the costs related to risk management and compliance. It also means modernizing current data storage solutions and updating existing platforms to provide more friendly customer experience and enable more progressive solutions. 

All in all, there are 4 key technologies financial companies should implement to effectively manage their operations and become digital-first:

Cloud.

The number of fintech companies that adopted a cloud provider is steadily growing.

IBM has already announced its collaboration with Bank of America to develop a secure fintech public cloud solution. Although only 22% of them currently run on the cloud, 2020 will become a tipping point for the industry. The majority of fintech starting today are cloud-native, which lets them be agile and scalable. 

It quickly became the mainstream in banking, providing a blend of IT, public and private clouds. This results in such benefits as compliance, governance, reduced costs, enhanced innovation, security, and operational efficiency. The ability of fintech firms to quickly innovate and offer customer-centered services lies at the core of the fintech revolution, which is impossible without cloud computing migration.

Big Data.

The financial industry has become a leader in the adoption of advanced data analytics.

71% of finance organizations are already seizing the benefits of more personalized products for B2C and B2B clients. Although Big Data is a necessity for fintech companies, it is also a real challenge. Increased volumes of data created by a number of sources are often too much for legacy data systems to handle.

By 2020, there will be 44 trillion gigabytes of digital data to sort through. Doing it, financial institutions need to take advantage of Big Data solutions that offer customer segmentation (gender, age, economic health, location, online behavioral patterns), fraud detection (prevention of suspicious activity), and risk management (predictive analytics). 

Artificial Intelligence.

With 5G’s stable connection and IoT’s explosive growth of unstructured data, there is more information to be analyzed in real-time. This makes finance companies turn to AI/ML algorithms. Therefore, they can become more mobile, gain insights into customers’ behavior, and tailor their products and services more effectively.

Suddenly, finance organizations can work with large volumes of data and improve business processes using smart help.

AI makes chatbots provide informed financial advice, helps to detect fraud, and guides customers’ investments that led to the creation of such terms as machine intelligence and augmented finance. In fact, 54% of bank customers demand personalized real-time advice, while 41% state that they don’t mind taking it from an AI, and this demand keeps growing. According to statistics, 45% of frontrunner firms that invested $5 million in AI initiatives increased their revenues 3 times. Meanwhile, 25% of those who invested $10 million have also noticed a great change in customer experience level. In general, AI lowered operational costs by 20% which definitely makes it the future for financial services.

Blockchain.

Experts say that Blockchain has a transformational impact on the fintech industry throughout the entire spectrum of financial services.

Apart from cryptocurrency use, it helps with information exchange, automating processes via smart contracts, global payment transactions, security, fraud detection, verification, KYC, and loan processing. From monetary transactions to transferring contracts, financial institutions will be applying Blockchain technology more as popularity grows.

2020 offers digital-only banks, APIs use, fintech mobile wallets, online global transfers and other opportunities for business growth. Financial institutions have to understand the full use case for these technologies and apply it to offer better products and services to the end-users. Using this driving force, financial organizations can redefine themselves, stay more competitive and responsive to the market needs.

Notably, today over 51% of the US and UK companies experience a lack of professionalism to put tech into practice.

Partnering with a reliable technical development team may be an efficient way to mitigate the talent shortage. Remember that even a small step like app development or website redesign can boost your sales and attract new customers.

How to prepare for digital transformation?

Taking into account all the challenges, there are 6 key priorities for financial institutions to achieve success in 2020:

Update your current system

…as well as the IT operating model.

Even if the system serves you well today, it should be updated regularly to keep up with a technology-driven world. Think about modernizing the platform, adding features, implementing automatic regulatory tools, or applying AI-powered algorithms. This will increase performance and provide your customers with more options.

Slash costs.

Financial institutions spend twice as much as they need on IT operating costs, regulatory fixes, cybersecurity, and fraud prevention. Meanwhile, it is possible to cut expenses by simplifying legacy systems, adapting robotics and AI, and using a reliable technical partner.

Use technology capabilities.

Get more intelligent about your clients’ needs and act in real-time. This is one of the key points affecting the financial industry as it drives more revenue and profit. You need to change the way you interact with your customers using a smart balance of human and machines;

Prepare your architecture.

Be ready to connect to anything and anywhere: enterprise databases, cloud services, B2B (partners systems) and B2C (individual mobile devices) connections, IoT sensors, third party sources of big data, etc. There are many complex and diverse systems that can coexist and cooperate;

Take care of cybersecurity.

Fintech has been suffering from security risks for decades and many financial institutions rely on an outdated model. However, the traditional approach no longer works as IT risks constantly evolve. Thus, keeping abreast with it becomes a priority;

Get the necessary talent and expertise.

Make sure you are ready to meet all those challenges with the right technical execution team. Partnering with a third-party talent to create the right solutions and manage the operations is essential in the finance field.

Implementing these strategies, companies should also pay attention to three C’s: credibility, collaboration, and customer experience.

Customers are always skeptical so building trust becomes a necessary task, especially with new technologies integrated. Partner with similar businesses to create a network of like-minded people and produce perfect, clear, authentic, and informative online experience for your customers to build positive long-lasting relationships.

Summary

Transforming the finance industry is certainly not an easy task. Lack of specialists, tools, budget, and knowledge are the main roadblocks for the financial sector. However, reshaping financial services creates a lot of opportunities for companies to reinvent their business models through innovation.

Looking ahead, the blend of technology, regulations, investor capital, and globalization will lead more fintech developments in the coming years.