All this became possible due to the information technology revolution powered by the internet, software consulting service, and software development. The credit for this digital revolution goes to the global software team of qualified professionals.
What Is Industry 4.0?
Industry 4.0 has become a commonplace word in the modern industrial world nowadays. This term was coined for the first time in a high-tech manufacturing project started by the German government in 2011. This term signifies the Fourth Industrial Revolution that digitally transforms the manufacturing industry by leveraging the power of digital automation in the manufacturing processes. Industry 4.0 is a part of the 4th industrial revolution that uses the modern forms of information technology to enhance and improve the manufacturing facilities.
Impact of Industry 4.0 On Economy
The impact of industry 4.0 on the modern global economy has already emerged significantly. Moreover, the future impact of I-4 is going to become huge in the coming years because almost all industries and sectors of businesses are putting their full efforts to leverage the power of industry 4.0. All major countries and big companies are investing hugely in the R&D center activities and the professionals of the software development team to materialize the de facto objectives of this modern concept.
McKinsey Global Institute has recently predicted that Finance 4.0, a subset of Industry 4.0 would help grow the emerging economies by over 6%, which will account for about $3.7 trillion by 2025. According to the United Nations Trade and Development information, more than 37% of the foreign direct investment FDI to the developing countries was made through technology.
The addition of over 10 billion mobile internet devices in the global market contributes billions of dollars to the global economy. The market size of mobile accessories only accounts for about $62.7 billion in 2016. The software development has improved the productivity and efficiency of not only manufacturing but almost all domains of businesses, which contribute to the global economy hugely.
A new industry known as self-driving cars is expected to add a whopping amount of over $173.5 billion by 2023 at a 36.2% CAGR growth during the next 3 years, according to the Market Watch market forecast. The contribution of the software consulting service sector to the global economy is also huge. According to the Grand View Research forecast, the share of software consulting services in the global economy would be about $382.62 billion by 2025.
There are numerous other sectors powered by the industry 4.0 concept that are contributing hugely to the global economy. In the nutshell, the industry 4.0 ecosystem in all domains of global businesses and industries would play a pivotal role in the future and prove to be a key driver in catapulting the future growth of the global economy.
How Industry 4.0 Is Impacting the Financial Services Sector?
The fourth industrial revolution has unfurled its wings over all industries to impact them positively. The financial services sector is also one of the sectors that have leveraged the power of industry 4.0 extensively. Banking, insurance, mortgage, forex, stocks, and many other financial sectors are thriving due to the positive thrust of digital innovation and financial process automation in all countries of the word.
According to Nielsen Research, mobile devices have become a new norm for banking activities. The developing regions like the Asia Pacific and Africa are becoming the major driver of mobile banking in the world. In the US, more than 70% of the stock trading decisions are decided based on computer algorithms, while just below 10% of the stock decisions are made by individual experts. This saves a huge amount of financial consulting services. Technology powered micro-loans in Bangladesh opened up a new era of financial empowerment of the disadvantaged people in rural areas.
The new crypto banking system based on blockchain technology is going to drastically transform the financial sector very soon.
Let's summarize the impact of industry 4.0 on financial services.
- The fastest financial transactions globally
- The cheapest financial service charges
- Huge decrease in operational cost of financial institutes
- The easiest access to financial services round the clock
- Removal of middleman and central regulation
- The reduced requirement of human tech-talent
- Increased use of robotics and artificial intelligence
- Effective, efficient, and targeted marketing
- Effective customer support through bots at very low cost
- An increased area of operations
- Reduced risk factors through data-driven assessments
- Better business intelligence
- Greater user experience
- Reduced leakages in funds and projects
- Increased transparency and trust
- No human errors in financial activities
- The emergence of new business domains like FinTech, payment gateways, and others
- Financial inclusion of the poor and disadvantaged people
- An increased volume of liquidity
- Effective use of available assets and money
- Efficient trading of stocks and forex
- Reduced number of frauds and burglary
- Increased customer satisfaction
- Smart contracts powered by blockchain technology
- Easier accountability and responsibility fixing
Financial services are hugely impacted by the industry 4.0 concept powered by software engineering and information technology. Industry 4.0 has already left a highly desirable impact on the global economy by contributing many new industry sectors and great market value. The financial services are the major gainer from industry 4.0 by adopting its growth and market size significantly.
Anastasia Stefanuk is a passionate writer and Information Technology enthusiast. She works as a Content Manager at Mobilunity, a provider of dedicated development teams around the globe. Anastasia keeps abreast of the latest news in all areas of technology, Agile project management, and software product growth hacking, at the same time sharing her experience online to help tech startups and companies to be up-to-date.