Technological innovations in financial services are being driven by Web 3.0

Web 3.0 is driving technological innovation in financial services

Financial services have seen a surge in technological innovation over the past decade.

FinTechs, a collective term for companies that use technology to efficiently offer financial services to customers, have paved the way. We have over 6,000 FinTechs in India and this number is growing across the spectrum of financial services – from regulatory tech to fully fledged digital native neo-banks, from lending tech and payments tech to regulatory tech.

They coexist online alongside established banks (like HDFC, ICICI, SBI, etc.) and big online companies like Google Pay and WhatsApp Payments. Ecology is thriving and this trend is not unique to India. Globally, there are comparable patterns in the US, Europe, China, Africa and other nations.

What will the next ten years look like? Is the technologically driven change in financial services coming to an end or are we entering the next disruptive wave? These are important requests, especially given the downturn in the FinTech sector caused by lower valuations and negative revisions.

Looking at the bigger picture, I believe the current slowdown is just a temporary standstill. In the next decade, advances in technology such as embedded banking, banking-as-a-service, digital banking, etc. will accelerate the transformation of the financial services industry. Numerous causes, including next-generation technology spearheaded by Web 3.0, will drive this decade of accelerated transition.

What is Web 3.0 Technology?

The next level of web-driven technology is known as Web 3.0 and will transform the way people manage their digital footprint, improve customer experience and leverage technology in the financial services industry. But what is Web 3.0 first?

  • Stronger data ownership for users: Web 3.0 will increase users’ autonomy by allowing them to truly control their data. Today, web content producers benefit from a person’s digital footprint. The goal of Web 3.0 is to give end users ownership of their data. Users will be able to segment their data, choose what to share when, and determine how to monetize it using technologies that make this possible by using distributed ledger technology (DLT) with intelligent combine contracts.
  • Decentralization: In addition, Web 3.0 aims to decentralize control over content. Large corporations now control, approve and regulate information on the Internet. Web 3.0 envisions a web of peer-to-peer (P2P) communities of people owning and sharing material, reducing the role of a single company in managing the flow.
  • Intelligent or “semantic web” powered by AI The term “semantic web” was first used by Tim Burnes Lee, who also created the Internet. The semantic web is a state where computers use artificial intelligence to understand the material and contextualize it using metadata and vocabularies. The voice and AI-driven intelligence capabilities of Apple Siri, Amazon Alexa, and other devices are some early examples of technologies that will continue to spread and evolve in Web 3.0. WolframAlpha is a knowledge search tool that blends searching with contextual information computation.

why Web3.0 blockchain technology is powering a $6 trillion market |  technical republic

  • One of the key elements of the modern web is its community model, which is a trusted system without a central middleman. The foundation of the community model is an intermediary that verifies, authenticates, authorizes users, and grants them access to a community engagement platform. The middleman feeds the community while monetizing the data and cross-selling opportunities. The Web 3.0 paradigm focuses on being trusted and permissionless, eliminating the need for a middleman to review interactions, and allowing users to communicate directly with one another.
  • Leverage blockchain, DLT and smart contracts extensively: Blockchain, distributed ledger technology (DLT) and smart contracts for execution will be the driving forces behind the decentralization of Web 3.0 and its trusted, permissionless capacity.
  • Immersive and ubiquitous: Web 3.0 will be ubiquitous, further integrating voice, face and location recognition technology. By using AR/VR platforms that interface seamlessly with the Metaverse, it will provide context-aware systems that allow users to interact more.

As a result of these technologies driving Web 3.0, financial institutions will change the way they deliver services. More immersive, non-intrusive and integrated banking services are already beginning to emerge. Financial services will be significantly transformed by Web.30 technologies, including voice, facial recognition for banking, AR/VR-based digital branch banking, robo-everything, and smart contracts for execution with trusted, non-intermediary systems.

the beginnings of web 3.0 - and what it means for the financial world of today and tomorrow - cna

Regulatory technology must also adapt to this development. In addition, we will have customers who want us to manage their data more freely and openly. Over the next decade, these factors, aided by Web 3.0, will drive technological change in the financial services industry.

Web 3.0 will connect data from organizations, people and machines around the world, creating a wealth of data in an ecosystem that can be processed quickly with enhanced AI and ML. This results in new markets, new business models and a wealth of other opportunities that we cannot yet assess today. The expression “return to the global community” could be used quite well. 74 Blockchain technology will be the foundation of Web 3.0. Web 3.0 will witness the merging of cutting-edge technologies that will take the internet to levels of efficiency never thought possible before as blockchain continues to grow and eliminate inefficiencies in most things it touches.

There will undoubtedly be dangers and it is wise to identify, understand and reduce those risks. Both the financial services industry and other industries will experience a radical upheaval. Web 3.0 will even create new market segments and customer demographics. A timely reminder of what technology is capable of is provided by COVID-19. The importance of innovation and the uptake of technology has been demonstrated once again around the world. When the transformation happens, companies need to embrace it and be ready to take advantage of Web 3.0. A key part of Web 3.0 and a clear departure from Web 2.0 is the preservation of digital freedom of expression.

In theory, the next phase of decentralization will return control of a network to its users. Although it seems good, it comes with responsibility and can be very difficult for both organizations and individuals. Web 3.0 is approaching and offers several possibilities. It is entirely up to us how we react to it, how we use it for the common good and how we keep reinventing it. We’ll no doubt be talking about Web 3.0 in many ways in a few years, but to participate and benefit from it, we need to prepare for this new age.

Edited by Prakriti Arora

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