6 Breakthrough Technologies Transforming Financial Services in Scotland

09/08/2024
Image by Luke Chesser on Unsplash

By David Irvine

The late 2010s and the early 2020s were a period of unprecedented disruption to global markets, pressing business leaders in Scotland and around the globe to react to sudden fluctuations and rapidly adopt new, emerging practices.

Like other industries, the world of banking and financial services is in a state of flux, with emerging technologies being spurred on by new consumer demands and macroeconomic factors. It’s essential that we stay up-to-date with these changes and the impact they’re poised to have on our work in the near future.

Here’s six breakthrough technologies that are transforming financial services in Scotland.

Embedded Finance

The growing popularity of embedded finance – tech that allows traditionally non-financial platforms to integrate services around financial products such as loans and insurance – is beginning to redefine the standards that consumers hold for financial services in Scotland. 

While clients used to have to go through the lengthy process of filling out forms and waiting for approval when they wanted to borrow, embedded finance has now given everyone access to credit with just a few clicks of a mouse. 

Traditional financial institutions will be under pressure to craft their own embedded finance offerings or form partnerships with popular purchase finance providers.

Regtech

Financial institutions are among the most heavily regulated kinds of organisations in the world, and compliance is a source of difficulty among even the biggest names. Because the consequences of not following financial legislation can be so severe, there’s a huge demand for services that can make regulatory compliance that much simpler.

Regtech firms such as Onfindo are seeing more and more traction from companies who need help to “satisfy global KYC and AML requirements” and protect against cybersecurity risks, while enjoying the assurance and efficiency of a specialised third party.

Streamlined POS Systems

Though in-person shopping took a hit in recent years due to the pandemic and cost of living crisis, it certainly didn’t disappear. Many businesses still attribute a large portion of their cash flow to transactions handled in physical, brick-and-mortar premises. 

Like other pieces of financial tech, POS solutions have adapted rapidly to consumer and business behaviours. Payment solution providers have distinguished themselves by providing merchants with intuitive “one-click reports” that allow them to analyse their physical store cash flow in detail, and consolidate brick-and-mortar transactions with their eCommerce activities.

Digital Wallets

With the continued proliferation of smartphones, wearables and other tech, modern consumers are increasingly expecting merchants to accommodate a preference for digital wallets over cash and plastic payment cards. 

The ease of use offered by mobile digital wallets has driven a huge wave of adoption among businesses. The majority of modern POS systems now offer digital-wallet-compatible ‘tap and pay’ options, and countless eCommerce brands facilitate Google Pay, Apple Pay, etc for online purchases. 

Leading Fintech firm FIS Global even ran a report predicting that digital wallets will “account for more than a third (33 percent) of all in-store payments” by 2024, continuing a trend that may see this tech completely eclipse plastic payment cards.

Blockchain Technology

Though blockchain technology has been in use for more than a decade now, the world is seeing a slow but certain emergence into mainstream business, with financial institutions leveraging it to guarantee ever-higher levels of security. 

Blockchain tech’s ability to make data unalterable makes it ideal for protecting private data, verifying customer’s identities, keeping accurate transaction records, and much more. Blockchain’s inherent dependability has the potential to make it a godsend for many financial institutions, and proponents say we’re only just starting to see its full scope!

Artificial Intelligence (AI) and Machine Learning

Today, artificial intelligence and machine learning are hugely disruptive pieces of tech in countless different industries, and the world of finance is no exception. 

Aside from improving the standards of customer service through chatbots and virtual assistants, financial organisations have been able to use AI and machine learning to crunch huge reams of data to find trends, detect and prevent fraud with greater reliability, and make more informed decisions when carrying out risk assessments. 

Looking to the future…

As consumers and businesses rush to adopt new tech, the finance industry as a whole will have to reflect these changes with processes that are more efficient, flexible, and reliable. 

We hope this list of breakthrough technologies has helped you understand your own organisation’s place in the global business arena, and to better predict the big changes on the horizon.

David Irvine, the author, is a journalist who specialises in financial services and global markets.

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