The world of finance always was and still is heavily driven by the state of the world. This means that all the innovations that occur follow the needs and problems that people experience. So, all the users of financial services, stakeholders, customers, economic agents… All of them are, in a way, pushing the world of business finances towards innovating.
When it comes to the most relevant innovations in this field today, pretty much all of them are related to technology. Indeed, there is growing pressure on business finance for all the new technologies. The reason for this lies everywhere you look. These technologies have transformed how the entire world operates. It’s only natural to expect that the world of business finance keeps the pace. The development and spread of the internet had the largest impact. It has led to an enormous spread of digitalization and datafication. This is true both for social and economic aspects of our lives.
Having all of that in mind sets the base, there is a lot more to this topic. If you are interested in the latest innovations in the field of business finance – you have come to the right place. Here, we will first talk about outsourcing, after which we’ll address the technological innovations. Let’s begin!
Outsourcing is no longer just for large companies
Outsourcing is something that’s being done for quite some time already. The difference in the past few years lies in the fact that it’s getting more and more common. It is no longer considered a luxury, and a large number of small companies are adopting this practice. Why? What innovations have enabled this spread of outsourcing? Well, because of everything that we have talked about in the introduction, plus the nature of the jobs that are being outsourced.
The reason behind this
First of all, the very nature of business finance ensures a lot of benefits regarding outsourcing. Service companies that tackle accounting services, IT, phone systems are the most convenient way to unload the most important non-core functions. The options don’t stop there, and people even hire such companies to tackle HR administration, technology development, and more. These companies have become a very important aspect of business finances. They allow companies to stay focused on what they do best. At the same time, service companies benefit from leveraging their areas of expertise.
Because the practice of outsourcing ensures rapid growth, it’s no wonder that small companies are catching up. And the truth is, choosing not to outsource a part of your workload can even be considered a liability nowadays.
Ultimately, it’s no secret that not having to provide space for more employees saves money. Not to mention all the additional fees that go along with having more employees. But, how did we get from the point that only the biggest companies used these services to them being almost necessary?
The technology behind it
There is a reason for the fact that only big companies utilized outsourcing not so long ago. The technology behind these services wasn’t cheap. After some time, technology caught up with the trend. Now, VOIP technology with the help of cheap broadband costs allows phone solutions to every company that seeks them. The same goes for software platforms and IT outsourcing companies. In fact, now, people get to save money by outsourcing due to new platforms that weren’t available only five years ago.
Clouds and storing information
Clouds, even though they have existed for some time, have become a necessity these days for many reasons. Cloud computing is based on the utilization of a network of remote servers. Much like outsourcing, but regarding digital data, It is mostly used for IT services, but it is also a great way to store any kind of information. Clouds are very convenient, and they cut costs regarding computing services. Without a doubt, cloud computing provides more efficient options than relying on the on-site approach. No matter whether we’re talking about flexibility, efficiency, or scale – clouds have it all.
The big data problem
The main reason why clouds have become such a big deal is called the “big data problem”. This problem is based on the enormous amount of data. All the technological advances resulted in the fact that data is collected, shared, and processed more than ever before. Sources of such data have never been more diverse. While this information offers a lot of insight in various fields, storing it can be quite problematic. This is where cloud computing comes in. It ensures that all this data has a place where it can be stored at low prices and great organization options.
What about data analysis?
So, due to clouds, we have storage sorted out. But storing data is only one part of the entire process. Data isn’t worth much if context can’t be sorted out of it. The larger the scale of data, the harder it is to analyze it. This is where advanced analytics techniques come into play. Innovations in data analysis are extremely impressive, so – let’s talk about them.
Most of these advanced techniques are based on artificial intelligence. The most common features of such techniques include predicting, visualizing, text mining, advanced machine learning, semantics, and sentiment analysis. The idea behind all these techniques is based on making the sense of data that is useful for further use.
How does AI help?
AI has a huge role in predicting the behavior of various variables regarding the financial market. Both consumers and transactions can be tracked, and useful data can be extracted with new techniques. Not only does this type of analysis help with making the sense of data, but it also speeds up the implementation of new financial strategies. Predictions on AI advances suggest that automatic self-execution based on previous experience is going to be a common theme in finances soon.
In the current conditions, data analytics of such sort are most developed in the insurance sector. In this sector, predicting data from statistics is very important. The most prominent variables for predictions include policies, fraud detection as well as claim settlement.
As technology continues to evolve, financial systems all over the world are going to continue to adapt. All how they adapt will always be based on innovating. Now, innovation doesn’t always come in a form of a completely new invention. In fact – more often than not, it lies in providing alternatives in line with already existing ones. This way, things change more gradually, allowing everyone to keep up at a steady pace. This can be seen in all the examples of innovations that we have been talking about in the previous text.
No matter whether we’re talking about digitalization or artificial intelligence, all these new aspects offer immense opportunities. These opportunities are both operational and economic as well, and only time can tell where the possibilities lie. Without a doubt, this is a double-edged sword. New risks come hand in hand with new possibilities, but that is a topic for another article.
Some call changes inconvenient, and not everyone is prone to changing how they do things. Whatever your stance may be, one thing is certain – these innovations keep the world going forward.
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