Financial technology (FinTech) is transforming the banking industry, and companies that enable this trend to guide their customer experience could be positioned for long-term success. The road will not be easy. The increasingly complex challenges of supply chain management across industries mean that companies are relying on modern digital tools to increase their revenue streams and reshape their business operations to meet the needs of the industry. rapidly changing financial environment. According to research and markets, the value of the global FinTech market is expected to reach approximately $ 305 billion by 2025.
A spike in the market value of FinTech isn’t the only notable change in the industry. Global changes in consumer behavior and supply chain management triggered by the coronavirus disease (COVID-19) pandemic are leaving many manufacturing managers scratching their heads as they reflect on solutions to improve supply chain coordination. Strain on supplier and supplier relationships and the lack of on-site employees contributed to inaccurate reporting of item availability and delivery information.
Modern digital tools and easy communication between partners throughout the supply chain is a major factor in reducing the cost of data exchange. Instead of relying on ad hoc systems that use spreadsheets and emails to track supplier information, retail and manufacturing organizations need robust information platforms that are directly integrated into electronic communication channels.
Supply Chain Communication Best Practices
Whether your suppliers are using older systems or newer B2B communication standards to exchange information, you should look for a single solution with multi-format support. An integrated enterprise resource planning (ERP) solution helps businesses to simplify and reduce the cost of data exchange with as few moving parts as possible.
ERP-integrated solutions offer multiple modules to run your business process from a centralized location. This enables better management of resources and streamlines workflows. ERP-integrated solutions also improve data security and communication between employees.
Improved communication is a crucial step if you want to avoid disrupting the entire functioning of the supply chain and seamlessly navigate the speed of the FinTech industry. Highly imprecise demand forecasts and inefficient order fulfillment are two of the major consequences of communication delays and complex information tracking. Industry leaders know it as the boost: a small fluctuation in demand for a product at the retail level can cause a gradual and larger fluctuation in demand at the retail level. from wholesale.
If it’s so important and beneficial, why aren’t more companies implementing this idea? Naturally, getting started is expensive and you will need a highly skilled team to run the perfect ERP integrated solution. The first time you implement an ERP solution, data migration will take a considerable amount of time.
ERP systems depend on business partner information flowing in both directions. This establishes direct and automated communication between the two parties, reducing the possibility of operator error. It also means fewer re-entries, fewer delays, and more accurate inventory and delivery information (or in other words more time to do the aspects of your job that you actually enjoy).
Enabling faster communication between partners by eliminating unnecessary steps and directly connecting their business software is a great way to ensure accurate and up-to-date information about your products and logistics. You won’t have to rely on guesswork, and order fulfillment and replenishment will take much less time.
Improve workflow processes
Electronic Data Interchange (EDI) is useful for effective and efficient supply chain management; EDI can help reduce lead times, reduce documentation processing costs, eliminate procurement errors, clarify inventory status information, and improve strategic alliances along the chain. supply.
The first critical issue that businesses should be aware of when implementing Artificial Intelligence (AI) in their business operations is finding the right set of tools for implementing AI. The second important aspect is the integration of workflows and how seemingly disconnected business processes can be aligned in an automated fashion. Finally, AI needs to focus on creating a data ecosystem that can be used for a better decision-making framework.
Along with new revenue streams and improved business operations, adopting long-term AI strategies enables data-driven decisions that can predict future trends and outcomes. The incorporation of AI allows banks to manage and mitigate potential risks by analyzing a customer’s credit history and identifying metrics to predict whether a customer will be able to repay the loan or not. AI can also be helpful in fraud prevention through the deployment of automated audit settings and cybercrime mitigation by keeping customer data safe.
Fight against cyber attacks
AI and machine learning (ML) technology play a critical role in the fight against cyber attacks, working together to help manage risk. The technology is effective in terms of data aggregation and forensic analysis to understand the methods of the cyber attack. Additionally, AI / ML relies on rules-based learning that requires the system to fight specific types of cyberattacks and harness information before damage is done. It also recognizes and learns trends, so that future attacks can be detected and eradicated.
Security concerns, speed of innovation and user privacy are among the top 3 challenges facing the FinTech industry. Security is a major concern in FinTech, especially concerning when considering legacy systems from banks. FinTechs also face a need for speed in trying to keep up with ever-changing technologies. Finally, the industry faces challenges of compliance and data storage. This is where the digital transformation of the financial sector begins to impact the supply chain.
The future of AI in FinTech
According to Baker McKenzie, the ongoing economic expansion in the United States has attracted considerable investment in the FinTech sector. The power of AI is revolutionizing the financial industry and pushing organizations to take on new challenges.
AI will be a game-changer in the financial services segment, and according to a December survey by consulting firm McKinsey & Co., 26% of baby boomers and 44% of Gen Xers have already enabled the digital transformation of the industry. to influence their banking decisions.
As evidenced by this survey, the popularity of FinTech is not going anywhere anytime soon. In fact, the counts among the new generation of Gen Xers are increasing and they seem to be in the lead. Savvy companies need to invest in technology and supply chain operations that allow them to adapt to new trends in the financial industry if they are looking for a lasting legacy.