Fintech’s Secret Weapon: BPO Key Trends Unveiled

Most financial transactions now take place virtually. Many people prefer to go cashless when shopping online or offline. Given the continuously increasing demand for fast and smooth digital payment options, can financial technology companies handle all the work alone?

If you ask an enterprise aiming to save costs while increasing efficiency, the answer is “no.” Most fintech companies and financial institutions rely on business process outsourcing (BPO) to achieve such goals.  

What are the latest BPO trends and advantages that attract financial technology enterprises to partner with a service provider? This article has the answer. Continue reading to learn more.

A Glimpse at Fintech Outsourcing

Assigning specific back- and front-office functions to third-party teams answers the question, “What is BPO?” In the fintech industry, the practice is similar but more focused on the technological aspect of outsourced financial services. 

BPO in financial technology encompasses various support roles and responsibilities tailored to the needs of financial businesses. These include the following:

• Software development, management, and maintenance
• Data entry, organization, and analysis
• Cybersecurity and technical support
• Billing and payment processing
• Customer service and marketing
• Legal and compliance support
• Risk management and fraud prevention
• Cloud storage and backup management

Latest BPO Trends in Financial Technology

As BPO and digital transformation continue to coexist, industry trends constantly reshape how providers support fintech startups, mid-sized businesses, and large enterprises. Despite the complexity of these shifts, contractors adapt to achieve cost-effectiveness and enhance the customer experience.

Hence, you must understand the trends below before closing a service-level agreement (SLA) with an outsourcing company. The lessons learned from this article can guide you in planning your BPO investment and maximizing its benefits in the long term.

Artificial Intelligence (AI) and Automation Remain Prevalent 

BPO companies continue to optimize AI and automation solutions to provide scalable and affordable fintech services. These tools simulate human intelligence to accomplish common and rule-based tasks quickly and effectively, freeing employees from burnout and overwork.

For instance, support vendors can integrate AI-powered chatbots into your official websites or social media accounts. These bots serve as virtual financial advisers for your business, answering basic questions and concerns about your customers’ bank accounts and credit cards.

Such platforms do not require human intervention unless the client’s issue is urgent and complicated. Chatbots can respond to password reset concerns by suggesting knowledge base links. However, they must connect the customer to a human agent if the problem involves recovering a mobile banking account after a hacking attempt.

Furthermore, new statistics from IBM show that 54% of organizations experience cost savings and efficiencies from using AI to automate business processes. Due to these advantages, providers can offer the following fintech support services at competitive pricing:

• Financial data collection and processing
• Personalized financial report drafting
• Localized call center services
• Remote troubleshooting and information technology (IT) support
• Real-time fraud detection and prevention
• Accurate credit scoring and risk assessment
• Social media management and sales support

Blockchain Tech Deployment Expands

As online payments and transactions become more popular, BPO companies depend on blockchain to boost financial technology services. This advanced technology establishes transparency and trust between third-party providers, fintech businesses, and consumers. 

Here are some ways providers use blockchain technology to enhance fintech operations:

• Utilize a decentralized and immutable ledger for financial transactions. Service providers leverage these blockchain-based systems to facilitate safe and transparent peer-to-peer transactions, reducing the risk of fraud.
• Employ smart contracts to streamline contract management processes. These blockchain tools automate the execution of predefined terms and conditions for financial agreements. These deals include loans, insurance claims, and asset transfers.
• Deploy robust identity management solutions. BPO companies use blockchain-based verification systems to ensure the authenticity of an account holder’s data. This validation is critical for account openings and online payments. 
• Facilitate faster cross-border payments and remittances. Blockchain-powered payment networks help BPO teams reduce transaction fees and processing times for international fund transfers.
• Enhance supply chain financing and management in the sector. Blockchain-based supply chain solutions safeguard transactions, product origins, and inventory movements. It enables efficient logistics and trade finance operations for global trade and commerce businesses.
• Ensure regulatory compliance and efficient auditing processes. Service providers securely maintain comprehensive financial records using blockchain-based data management and auditing systems. The capability improves regulatory reporting and audit trail verification.

Open Banking Grows

Open banking is a secure gateway for sharing customer data between BPO financial technology providers and client organizations. This safe exchange via open application programming interfaces (APIs) helps deliver more personalized financial products and services. 

This tech trend lets BPO companies integrate multiple payment services, budgeting tools, and investment platforms into a single dashboard. The centralized system offers customers a more seamless digital banking experience. 

Because of such benefits, Statista reported that global open banking’s value reached $57 billion in 2023. The research organization expects the number of open banking API calls to increase to 580 billion in 2027. 

These figures reflect the rapid growth and integration of open banking services into different financial environments. Hence, expect BPO companies to use the tech to provide these services:

• Aggregate and make sense of financial data from multiple resources.
• Provide actionable insights into customer behavior patterns and financial trends.
• Customize loan offerings, financial plans, and investment strategies.
• Facilitate real-time fund transfers and integrated payment solutions.
• Broaden market reach and fintech product offerings.

Cybersecurity Investments Increase

BPO organizations constantly improve their efforts to strengthen data and system security. In its latest report, VMware stated that 63% of financial institutions encountered a 17% increase in destructive attacks in 2022. These incidents include deleting data, cutting connections, or executing malicious code. 

In a separate study, Cybersecurity Ventures warned that the cost of cybercrime will hit $10.5 trillion by 2025. Service providers double their cybersecurity efforts to avoid wasting such a huge amount of money.

Aside from hiring experts in this field, service providers invest in AI-powered cybersecurity tools to protect sensitive financial data, including personal and bank account information. BPO companies also conduct the following strategies to strengthen financial technology security:

• Perform in-depth risk assessments to pinpoint vulnerabilities within the fintech company’s infrastructure. 
• Evaluate potential cyber threats and weaknesses to develop tailored risk management strategies.
• Implement robust identity verification protocols, including multifactor authentication and biometric recognition.
• Perform regular security audits and compliance checks to identify possible gaps in security protocols. 
• Use the resulting insights to further strengthen the fintech company’s cybersecurity posture.
• Deliver cybersecurity training and awareness programs for in-house and third-party professionals working with fintech companies.
• Optimize advanced encryption technologies to protect sensitive financial data and communications within the fintech network. 
• Integrate threat intelligence tools to proactively monitor and identify cyber threats targeting the fintech company’s systems. 

The Bottom Line

Amid the fast-changing fintech landscape, BPO has emerged as a key to driving innovation, efficiency, and security within the sector. As revealed, service providers continue to act as fintech’s cost-effective weapon for addressing simple tasks such as data management, customer engagement, and regulatory compliance.

Moreover, integrating AI, automation, blockchain, and open banking helps BPO companies personalize experiences and execute robust security measures. Embracing these trends lets vendors and clients unlock new growth avenues and solidify their market position.

So long as tech continuously evolves, BPO remains a steadfast ally of financial technology businesses. Let’s connect and redefine the boundaries of fintech. Our dynamic team at Unity Communications can help you adapt to the future of digital finance, one groundbreaking trend at a time.