Category: Financial Services

How will Digital Transformation Reshape Financial Services in 2022

Posted on by Idexcel Technologies

Digital Transformation Reshape Financial Services

The Financial Services industry has gone through a swift and substantial digital transformation journey in the FY 2020-21 via. cognitive automation, conversational servicing, digital embracement, video KYC, open banking etc.

Presently, 55% of financial service organizations have extended resiliency plans to future-proof their business and enhance profitability, innovation rates and cost efficiencies by greater than 20% in contrast to their peers. As per statistics, the global digital payment market size is anticipated to grow at a CAGR of 15.2% between 2021-2026. Also, by 2023, 90% of organizations worldwide are expected to emphasize on investments in digital tools to supplement physical spaces and assets with digital experiences.

The demand for digital technologies is gaining prominence in the financial services industry and going forward innovation is going to play a major role in accelerating the origination of new digital financial products.

1. Current Lending Landscape

 (i) COVID impact accelerating Digital Transformation: The impact of COVID-19 on Digital Transformation in Financial Services is detailed through the following steps:

   (a) Greater Automation to Create Contactless Services: The increased tendency of customers towards buying contactless services has led financial organizations to adopt automation. e.g., applying for a loan

   (b) Increased Focus on Technology: The push towards Digital Transformation in Financial Industry has led several organizations to review their investments in the technological sector. This in turn has fueled innovation. e.g., integration of AI in Lending.

   (c) Focus on Customer Experience: Recently, AI based Lending has allowed lenders to shorten the loan process by applying digital transformation. An Automated Loan Approval process lets lending organizations quickly close more qualified loans.

   (d) Maximizing Operational Efficiency & Minimizing Costs: Digital Transformation in Financial Industry is continuing to assure cost-efficient operations while remaining extremely competitive. Optimizing business efficiencies and operations across the supply chain is financial services organizations’ top digital primacy to reduce costs and maximize revenue.

   (e) Increased Investments in Cybersecurity: With more reliance on digital platforms for performing traditional operational processes, there is a huge transaction of critical information. Cybersecurity investments are set to grow high as organizations invest heavily in new advanced technologies and top-level cyberattacks propagate.

 (ii) Number of Lenders focused on Small Businesses: COVID-19 has expedited the adoption of Digital Finance Transformation and generated large opportunities in consumer lending. Now, there is a significant increase in lenders, available as options for small businesses to borrow.

 (iii) Regional Banks are now following FOMO: Seeing the results of the new lending age, regional banks are now following the digital transformation bandwagon. Currently, there are big investments from regional banks, credit unions and fintech companies, focused on upgrading their existing banking system to digital lending technology to facilitate faster lending.

2. Key Lending Predictions

 (i) More Lenders will evolve, catering focused on Specific Lending: To differentiate from traditional lenders and capture strong commercial loan growth opportunities, lenders are increasingly targeting specific industry sectors such as healthcare, transportation etc.

 (ii) Emphasize on Open Finance: Open Finance is based on data-sharing principles that can entitle banks to provide a wide range of possibilities to their clients that are especially appropriate to their requirements. With Open Finance, consumers could feasibly access more powerful private mortgages, pension funds, savings systems, credit/loan, insurance, and investments.

The map below shows countries that are effectively implementing their Open-Finance infrastructure:

>Digital Transformation Reshape Financial Services

 (iii) Increased Spending on Technology and Teams: Recently, a rise in technology and teams spend is seen as a response to the pandemic. Financial service organizations are witnessing continuous disruption with expedited spending as technology speeds forward at a quick pace. Consequently, it is a mandate to stay highly competitive.

 (iv) Integration of API’s from Data Aggregators: API providers build, expose, and operate API’s. e.g., 1. Data Providers API, 2. Machine Learning via an API. API integration from Data Aggregators allows for seamless integration and a quicker turnaround time.

 (v) Apps give enhanced visibility for Borrowers: Given its fast-paced nature, lending apps exclude the need for a physical loan application process. These apps connect the lender, and borrower, offering wholesome loan servicing.

 (vi) Significantly more accurate default predictions using more data: Data is fundamental to business intelligence and with digital transformation providing more access to useful data, higher is the capability to accurately predict the probability of default.

 (vii) Customized Lending Rates for everyone based on your Data: Better data enables better customer understanding which empowers banks to provide their customers with personalized lending.

 (viii) Digital Assistants will help both Lenders and Borrowers: Digital Assistants or Mortgage Chatbots greatly assist lenders in loan servicing and play a crucial role in constituting the decision-making process for borrowers. They are known to significantly reduce the time and effort in decision-making and processing loan offers.

 (ix) Increased Automation across several workflows to Reduce Costs: Increased automation across workflows considerably minimize the probability for human error, thereby aiding to ensure consistency, process adherence, compliance, and greater security. In well-knit digital lending organizations, an Automated Digital Loan Approval process virtually eradicates the wearisome sorting of paper and electronic files, besides reducing manual data entry.

 (x) Decentralized Lending (DeFi): DeFi is a peer-to-peer financial service working on Blockchain platform and as one of the financial services they do have the option to facilitate loans. These platforms offer loans to users at competitive rates in comparison to the traditional lending platforms.

 (xi) Lending in Metaverse: The metaverse is a concept of a consistent, online, 3D universe blending multiple virtual spaces and letting users work, engage, and interact together in these 3D spaces. The concept allows our avatars to own entities such as properties, and other artifacts. For us to own these, for e.g., a loan requirement, there are lending institutions who can offer the same.

Conclusion: Recently, banks have accelerated the pace of Digital Transformation in Financial Services owing to the rapid growth of technology. Also, many AI Based Lending apps have emerged with the extensive use of smartphones. Both AI and Automation have just started to explore the boundaries of profitability, efficiency, expenses, and end-user experience in the lending landscape. This year, Digital Transformation in Financial Industry will enable banks to build the next generation experience.

How is Cloud Computing Transforming the Financial Services Industry?

Posted on by Idexcel Technologies

Cloud Computing in Financial Services Industry

An increasing number of financial institutions are transforming their systems and exploring how cloud computing can help. The COVID-19 pandemic has further inspired financial and banking leaders to incorporate cloud and security in financial services. According to The Next Web, cloud services have served as a saving grace throughout the unprecedentedly challenging time, making it easier for businesses to allow employees to work remotely, efficiently, effectively, and securely. While digital transformation without the cloud is not impossible, its scope will be very limited.

If you are curious about the transformational possibilities of cloud computing in financial services and need more information to determine whether it’s the best path for your bank or other financial institution, keep reading.

Improving Operational Efficiencies in Financial Institutions

Top cloud service leaders work to design and build a system that focuses on the big picture for your FI, which includes user experience to drive satisfaction and success for all.

Further, the flexibility and scalability that cloud adoption offers allow your financial business to quickly adjust to operational changes, empowering you to handle greater volume without worrying about adding more storage capabilities or staff to manage it all.

Reducing Costs

When you move your data and key business applications to the cloud, you don’t have to store them locally, continually upgrading your storage needs with quick fixes. Even better, you no longer need to worry about your physical infrastructure since your cloud service provider has it covered. With the Pay-as-you-go pricing models provided by the cloud providers, you’ll enjoy huge savings associated with no longer worrying about buying, maintaining, upgrading, and housing the necessary hardware.

Increasing Data Storage Options In the Cloud

The need for more data increases daily, making it challenging for on-site IT teams to keep up with the demand. With the right cloud service provider, you have access to virtually unlimited cloud storage without worry.

Enhancing Availability and Resiliency Through Redundancy

Redundancy, creating backups and fail-safes, can help make applications resilient and more readily available. Many cloud service companies are building various redundancies to guarantee that data is always available and secure. A few redundancies include:

  • Availability Sets, which protect against localized disk or network hardware failures. Virtual Machines (VMs) are spread across different fault domains, defining the VM group that shares a common power source.
  • Availability Zones, which serve as isolated data centers within a cloud service system’s regions.

AWS has developed several strategies to improve availability, resilience, and sustainability through faster innovation and enhanced security, accelerating deep learning workloads, investing in faster processors, and much more.

Freeing IT Teams to Manage Core Organizational Projects

Investing in cloud services means that your IT team can focus on strategic planning, core organizational objectives, and on-site employee support and training. Engineering-focused IT team members can take on projects like app development to improve customer experience.

Boosting Customer-Banking Relations

Pleasing customers is high on your priority list, and cloud computing in banking offers many ways to do that. With cloud services, you can control customer data instantly and better understand their financial habits and account management preferences. Additionally, you can improve the customer experience and offer instant and accurate information, consistent accessibility, and peak performance to keep their visits brief, easy, and satisfying. Customers will enjoy a better experience with fewer disruptions and outages. Even if there is some disruption, cloud computing resources make it easier to get back online quickly, ensuring continuous availability to customers.

Tightening Up Security

Cloud service firms continue to dispel any fears that experts have expressed over cloud security over the years. With the right cloud platform partner, keeping your data in the cloud is safer than keeping it on-site with effective SSL management options, enhanced credentialing, and data encryption.

Many cloud service providers take a proactive approach to tackling DDOS attacks, avoiding data breaches, preventing data loss, strengthening access points, and sending prompt notifications and alerts.

Streamlining Compliance Standards

The digital world is brimming with risks, making compliance standards essential for everyone, particularly financial institutions. Once you move into the cloud, you’ll find that your provider must remain compliant with all relevant regulations.

The financial industry is brimming with regulations to protect multiple parties, including customers, investors, and financial institutions, and it’s imperative that all parties dealing with a financial institution’s data, including a cloud hosting service, must remain compliant.

Cloud computing helps to achieve compliance by taking the necessary steps to secure data and mitigate risk. Further, cloud providers also offer several dynamic tools and features across network security, access control, data encryption, and configuration management. All these tools and features help customers meet their security objectives and remain compliant with their information security standards.

Are You Ready for Cloud Computing Services to Transform Your Financial Industry Enterprise?

If you find any of these transformative possibilities exciting, it might be time to consider moving to the cloud. Our Idexcel team offers an array of cloud services to enjoy a bounty of benefits. With over 20 plus years of experience fine-tuning various digital technologies, we can help you take your financial business in any direction you choose.

Connect with our team to schedule your free assessment.

How To Build Business Intelligent Chatbots with Amazon Lex

Posted on by Idexcel Technologies


Enabling Business Intelligence in Chatbots with Amazon Lex

In this fast-paced digital age, organizations need a fast and efficient way of gathering information. Especially in a customer-driven market like fintech, “time is money ”. Decisions will have to be made accurately and fast. Incorrect decisions can lead to severe consequences or lost customers. In several fintech applications, information is made available through reporting solutions, presentations, charts, etc. What customers find difficult is digging out the specific report or data needed through a multitude of mouse-clicks and then spending a lot of time analyzing them. There is a critical need for one central point from which a variety of data can be delivered to the user in an efficient and effective process. AWS technology and tools open several avenues to make this possible.

Amazon Lex – Machine Learning As a Service

Amazon Lex is one service that enables state-of-the-art chatbots to be built. It has redefined how people in the industry perceive building chat-bots. Bots themselves have gradually evolved from typical question-answering bots to more complex ones that can perform an array of functions. Amazon Lex offers features that tackle several complexities faced while building the previous generation of chatbots. The intent fulfillment, dialogue flow, and context management features of Amazon Lex help to make conversation with a chat-bot as human-like as possible.

This blog discusses how information can be retrieved from databases with a simple question asked to Kasper (the name of our bot). The following components of this blog will give a clear understanding to the user, how everything is built, networked, and coupled with a custom user interface.

Solution Architecture

Kasper is a chatbot built specifically for a lending platform to retrieve various data points based on specific inquiries. Like all bots, Kasper is also built on intents, utterances, and slots. After adding intents, its corresponding utterances, and slots, a few slots need to be added as custom slots. For example, there was a query – “show clients where invoice amount is greater than 20000”.  In the utterance section of Kasper, it was recorded as below:

 

Here ‘cola’ and ‘operatora’ are slot variables under custom slots ‘columnname’ and ‘operator’ respectively.

Natural Language to SQL Conversion

All the responses that require output from the database are sourced with the help of a lambda function. The JSON response from the lambda function contains the input transcript, intent, and slots information. The back-end application then receives the response from the lambda function, segregates the JSON, and classifies information into the corresponding intent and slots. The application extracts the slots and intents and then proceeds to build the query.

Responses from Kasper

Responses from Kasper can result in different formats of data. There can be single value responses, images, tables, etc. The types of responses are automatically determined from the intents. A custom website with a chat window has been developed for interacting with Kasper. The chat window can take in both texts, as well as audio inputs. The following are the detailed sections explaining each response type, with their corresponding chat window.

 

Response type I – Single values

There are instances where users might want to know about a sum or count or any other single value response. For example, an inquiry might be “count the number of clients whose due date is within 2 weeks” or “sum of the invoice amount of all clients“. The responses of these queries will be just a single value eg. “10,000”.

Response type II – Images and Tables

1. Tables

Images and tables are the next type of responses Kasper delivers. Once the SQL query is constructed, it connects with the database and retrieves data and stores it in a pandas dataframe. This dataframe can be exported as an html table for previewing through the chat window. It can also be downloaded in the form of a csv file.

2. Images

From the pandas dataframe, different charts/graphs can be derived. When an image response is expected, charts are generated using python libraries, saved to a file, and then exported to the chat window. Two types of images are generated – one is a thumbnail and the second is the actual image. Kasper is equipped with a feature named Auto-visualization. According to the dataframe, the function will decide what type of graph or chart has to be plotted. There are numerous rules applied before making that decision. For example, the function determines whether a specific column features continuous or categorical values. The resulting graph is plotted based on such combinations.

Response type III – Fallback mechanism with response card

The third type of response are response cards – a response to clarify the intention of the user. Suppose the user asks an ambiguous question like this “what is the amount of Apollo Inc. “. The chatbot will find the query to be missing some keywords because the user did not specify the type of amount (either invoice amount or balance amount). Kasper then prompts back with a list of possible options, so the user can select the appropriate option and receive the accurate result.

Kasper is a chatbot that has evolved to its current operational capabilities because of maximizing Amazon Lex’s potential and accommodating other significant AWS services to its architecture. Currently, Kasper can solve important natural language to SQL problems and a few FAQ questions as well. It can also be modified for other domain problems to suit specific needs. Over time, more capabilities will be possible to add and could serve as a first-line substitute for human support personal, freeing up your support team to help address more critical issues more quickly. If you’re interested in how a chatbot might improve your operations, schedule a Free assessment with our Machine Learning team today.

Want to learn more?