With Nordic Fintech Week 2023, what better time to explore the impact the internet has had and will continue to have on finance? The internet has made many industries unrecognizable, not least banking and finance.
Today, plenty of financial customers have never set foot in a bank! So, it’s not hard to see why the internet is an important aspect of finance.
But how is the internet going to change the world of finance in the years to come? What impact is the internet currently having on finance, how has the internet shaped finance in the past, and what do we need to watch in the future? Let’s find out.
It creates opportunities around the world
Online financial markets have created one of the most significant financial markets there are. With computers, the internet, and information technology, financial institutions around the world now have faster access to financial information than ever before.
This immediate information access not only means greater competition but also allows a quicker reaction to market fluctuations and other financial updates. On top of this, another thing that the speed of the internet enables is allowing borrowers to borrow money from any location. This is because online financial networks give lenders the ability to access a borrower’s credit rating and score right away.
Now, more than ever, you hear of malware like ransomware targeting organizations and companies internationally. After all, these businesses have access to all sorts of useful information.
Sure, healthcare organizations have borne the brunt of the most recent spate of these ransomware attacks. However, other prime targets are financial companies like lenders, banks, insurance companies, brokerage companies, and investment companies.
Though the internet has opened the financial world up to these hazards, IT solutions can also help many companies boost their security and operational efficiency.
Secure internet transactions
It wasn’t too long ago that going online was the less secure way to bank. If you wanted to be sure your money was safe, you had to go to a physical bank branch. Online banking wasn’t exactly feature-rich, either – after waiting around five minutes for the website to load, you could check your balance if your internet cafe connection was secure enough!
Though security breaches, identity theft and account hacking are still real threats, online banking security measures have come on a lot. Today, banks invest in cutting-edge systems to protect customer information and assets during transactions. As a result, information technology is now a crucial part of staying secure in online and offline banking.
Then there’s phishing. This is the name of the act of sending emails, phone calls, or messages to random people, impersonating a bank or organization in the hope of collecting further personal details to gain access to a person’s account.
For example, the message may impersonate your bank, asking for your password or login details so you can get online and deal with fake “suspicious activity”. The best way to beat phishing is to always log in through your app or a trusted URL – never through a link in a strange message.
If fraudulent activity is suspected on your account, modern IT systems give you an instant alert. You can review the transaction and confirm whether it was from you. Your bank will crack down on the transaction with equal speed. This wouldn’t be possible without the internet.
There are numerous other features associated with keeping your transactions secure, too. For example, access to location data helps banks verify whether a transaction comes from you, as does the information on where you shop and how much you have spent in one transaction in the past.
Of course, you’ll need fast and secure home broadband for optimum security when online banking.
Reduced customer acquisition costs
Customer acquisition costs can be steep in any industry. That being said, with financial services, customer relationships require plenty of trust between customers and the banking company. Because of this, the costs associated with getting customers in the financial industry are high.
That’s where the internet comes in handy. Not only is there targeted online advertising to help you find customers, but you can also use social media to share your insights and stories of existing clients.
Sharing knowledge publicly like this will help potential customers find you and connect with your objectives. From informal social media sites like Instagram to casual business platforms like LinkedIn, garnering millions of users every year, you cannot ignore the sheer reach of the internet!
Easy collaboration with other companies
When you see an ad on TV, what does it make you want to do? Chances are it doesn’t convert you to that specific company, but it still makes you want to buy that item, right?
The same is true of acquiring customers in the financial sector. Some financial companies spend hundreds acquiring customers, while others spend next to nothing simply converting them to their brand.
When you know a customer wants a particular product or already has it but is looking at other options, you have an excellent opportunity to convert them. One way to do this is by collaborating with other companies. Simply signposting customers to each other can save hundreds in advertising costs while boosting your reach tenfold!
You can even collaborate with organizations outside of the financial sector. For example, you could approach a local car dealership and ask them to point customers towards you for financing options. Or, you could partner with a charity and give customers an easy way to donate to them during consultations and online. All these collaboration opportunities boost awareness for both you and the organization.
Growing video advertisement opportunities
There’s no way you haven’t heard of TikTok. This short video-sharing social media platform has gone even more viral than any of its videos. The number of digital video viewers only continues to climb yearly. After all, the format is an accessible, quick way to present information.
And yet, most brands still need to embrace video advertising fully. With inexpensive drones or even the brilliant cameras on most modern smartphones, it’s never simpler to create a stunning presentation on anything. If you make a short video presenting the convenience you can bring to your customers’ financial needs and distribute this in the right places, you will quickly pick up plenty of conversions.
Increased customer feedback
In any sector, it pays to know what the customer thinks. And these days, with most people using social media to express their opinion and share their experiences, you have more opportunities to see what your customers think of your services.
If scoping out the likes, comments, and shares on your social media posts isn’t enough information for you, why not give your followers a survey? You could even have a competition where people leave a comment and share your post, too – a great way to boost your online visibility as well as gather customer information.
Partner with social media influencers
Have you heard of social media influencers? You probably have an idea of what they are, but let’s explain. An influencer is someone who has a vast following on one or more social media platforms.
An influencer’s followers trust them to recommend their favorite products and services. However, influencers are open to collaborations with brands and organisations. Thus, you can partner with an influencer and get the word about your latest product or deal out to the right people. If you find the right influencer – maybe a financial industry expert or investment writer – one post from them showing how they love your service could work wonders for your business!
Opportunity to invest online
Today, as long as you have access to the internet, you can manage your money from anywhere! Stockbrokers can work online. They can help set up accounts, buy and sell shares, keep you abreast of trade options and futures, and even convert between currencies – all online! International asset managers help you purchase investment funds; you can even choose from limit orders, stop-loss orders, and market orders.
Before you even begin investing online, the internet can also lend a hand in comparing the different financial products and services out there. Comparison sites like Money Super Market let you find the right deal and save money in minutes. Gone are the days of having to trawl around the high street to find the best deals on those big-value purchases. Just one search gives you everything you need to know.
Increased online banking features
Practically the only thing you can’t do online today is put cash into your account. Online banking has moved on a long way from when it first appeared. Today, your online banking app does so much more than allow you to check your balance.
You can invest, hold money in several currencies, transfer large sums securely, and even cash cheques just by taking a photo of them! You can also open up a new account in mere minutes and even get using your card without a physical copy through your phone’s NFC feature. Technology is amazing!