Finance and technology coming together is definitely a revolution for business and comfort for customers. The transformation is profitable and is benefiting businesses on a larger scale. Well having heard so much about it, what is Fintech? If you ask me this a million-dollar question a few years ago, then the fascination would be different. But now, there are many of us who know what Fintech is. This nebulous term has brought a radical change in how legacy finance worked and currently operates. Imagine yourself walking up to the bank for a small debit SMS not received after withdrawing Cash. This requires you to go to the bank every now and then. Now, with an app, you can get real-time information. This is transformation-Fintech.
Nowadays, businesses are moreover intriguing with what Fintech is capable of doing rather than what fintech is. Its implications can make a difference. The financial sector can integrate technology at different levels by going digital for their customers and the innovations leave no stones unturned.
What Are The Fintech Trends That Will Change The Finance Industry?
Fintech ideation is effective from the 21st century when finance businesses need to integrate technology in their back-end processes. We will first start with an understanding of what the term Fintech means.
According to a Fintech blog from TatvaSoft, The term Fintech refers to emerging technology that aims to enhance and simplify the distribution and use of financial services.
Fintech, at the most basic level, helps businesses, company owners, and customers efficiently control their financial transactions, activities, and lives through the use of advanced tools and algorithms that run on computers and, increasingly, smartphones.
The emergence of Fintech services in the 21st Century has its initial implications on the back-end systems of established financial institutions. Since then, however, there is a shift to more consumer-centric services and therefore a more consumer-centric definition. Fintech now includes different sectors and industries such as education, retail banking, fundraising and nonprofit, and investment management to name a few.
The Fintech sector emerged as a Financial business that operates on software for all types of financial services. All the businesses that claim to be offering Fintech services are basically offering financial services digitally. This is not easy. but technology has been favorable. The trends have changed and there has been a shift in the way business functions.
Let’s see how these Fintech trends are capable of building trailblazing software for the banking sector and contribute to shaping their success
1. Neobanks
Neo Banks are internet banks that do not have any physical branches. It’s possible to describe it as a true branchless digital bank. Neo Banks have no physical offices and do have an online presence. These banks usually have the old infrastructure and legacy processes. To make banking services more scalable, Neobanks layered its automated services and products on top of these legacy networks.
Neobanks are expanding at a fast pace, as shown by aggressive acquisitions, with many Neobanks raising $2.5 billion in past years. One of the main reasons for this exponential growth is that neobanks are releasing advanced features at a faster pace, thus improving their efficiency.
2. Global Financial Services Make-over With Blockchain
Financial services professionals have been speculating on the usage of Blockchain technology for years, waiting to see if the up-and-coming technology could affect business in the future. The term “Blockchain” is now well-known. Most of the businesses have already started to plan their usage within their business.
The word “Blockchain” has its in-depth association with new-edge finance terms – cryptocurrency and Bitcoin. However, mainstream financial firms have begun to use Blockchain technologies without Bitcoin to improve the efficiency and security of their own transactions. The implementation of Blockchain started lately. Blockchain is basically a database that registers financial transactions. Blockchain consists of a decentralized distributed ledger. This ledger can be circulated, written, and used in a number of places.
Blockchain is a trend that initiates cutting-edge features such as security, transparency, programmability, and high performance within businesses. Blockchain’s security aspect is irreplaceable and that reason contributes mostly to its success among businesses. The result of digital financial instruments is customizable to meet the needs of customers, widening the market for investors, lowering issuer costs, and lowering counter-party risk.
There are several use-cases of Blockchain specifically in the financial sector. The benefitted sub-sectors are capital market, asset management, insurance, trade finance, and banking and lending.
3. Ai- A Must-have Technology For Banking And Financial Institutions
John McCarthy is a popular computer scientist who invented the word artificial intelligence (AI) in 1956. At that time and now, it covers a wide range of topics, from robotics process control to the real robotics process. Because of the volume of data that these businesses work with, it has become very common among major corporations.
Artificial intelligence has provided the banking industry and the finance industry as a whole a way to satisfy consumer needs for smarter, more reliable, and safer ways to access, buy, save, and invest their money. Since AI’s very foundation is learning from previous data, it’s only logical that it can excel in the Financial Services domain, where bookkeeping and records are the essences of the business.
The technology AI easily integrates with all the financial functions to get expected business outcomes. AI along with ML has an extraordinary hand on financial services chatbots. It is a valuable platform for customer loyalty and an unrivaled opportunity for businesses, saving some extra cost and time. Fraud analysis is another major problem for the financial sector and AI plays a heroic role in Fraud detection and analysis. This excellent feature of AI leaves no qualms for businesses about frauds. It learns from regular transactions and leaving blocks of security checks based on experience. These timely security checks help businesses to make a decision and barricade fraud.
4. Growing Use Of Bitcoin And Cryptocurrencies
Consumers also have a hard time trusting a device that isn’t backed up by another body. Amidst all this, Bitcoin and cryptocurrencies became the latest trends. The use of Cryptocurrencies initially was by a select group of internet natives who were largely familiar with the technology. It felt challenging with the term and the ideology but at a later stage, it was easy for a brand to deal with different types of financial applications.
As per the Findex data of the World bank close to one-third of adults – 1.7 billion – are still unbanked. This means there are gaps in a financial structure that needs to be set up by fintech trends and one of its important parts is cryptocurrencies. Cryptocurrencies are no longer only for investment; they can also use anything from instant low-cost remittance to peer-to-peer financing and high-interest savings accounts. Thanks to a transparent and global group of developers that are constantly innovating new features and adding new editions in this financial trend.
5. Voice Technologies
The global voice-based smart speaker market could be worth $30 billion by 2024- Source
The trends keep changing but this one is all set to change the face of existing business. Yes, a Voice-based search has taken over the world like a storm. Every business is moving more towards making a voice-based search for their company. For it is banking or financial sector. Most people enjoy chatting via voice and are increasingly using voice-based technologies in their online conversations. Fintech voice assistants operated by AI provide ease and simplicity when it comes to handling financial tasks. With the use of biometric data for payment authorization, voice technology often advances safe payment options.
Voice assistants may act as automatic service agents by delivering simple account details. Like card balance information, responding to common client requests, setting up periodic payments, categorizing calls, and leading consumers to the appropriate locations. Fintech development services are quickly becoming the norm in financial markets, with a track record of providing valuable financial details, payment protection, and fast and straightforward transfers, among other financial trends. This voice-based search has accelerated the process in banks, insurance, and other financial sector and made the process easier for consumers.
6. Regtech Trend In Banking And Finance Sector
Do you think, this is a new name in this list of fintech trends? Well, then this one needs an introduction. RegTech stands as an acronym for regulatory technology. It is viewed as one of the latest advancements in terms of standard rules and changing regulations that are highly respected by the financial sector. It plates a vital role in overseeing business spends and contributions to the economy. Since in the finance sector, there are huge funds involved and hence the possibility of data breaches also doubles.
If you still don’t understand how Regtech functions then, let’s see what its role encompasses? RegTech allows businesses to use innovative technologies to streamline the process of complying with current laws and regulations. Identity security, regulatory reporting, account analysis, risk management, and enforcement tools are all types of Regtech systems. Banks and other financial institutions can significantly minimize operating overhead, protect clients, and maintain financial security for everyone with the aid of RegTech. Furthermore, the technology is lauded for ensuring speed, agility, integrative strength, and analytical capability.
In terms of smart technology, the massive amounts of regulatory standards are managed by automation, which is aided by big data and deep learning. These RegTech software systems are designed to look for trends in vast amounts of historical data and learn from them. As a result of which you can easily pick the problematic cases and even uncover them before the situation gets worsen.
7. Big Data And Cloud Computing
The last trend that has an impact on the financial sector is Big data and cloud computing. This fintech trend is strongly associate with banking enterprises as they deal with data all day. The majority of businesses have a data mountain on their hands. They risk missing out on the useful insights this data will have if not read on time.
Data gives a crystal clear view of a customer and it keeps on varying. Data stored in a data lake is more readily accessible. the digital data is stored in the banks. These Data banks can store large amounts of organized and unstructured data. We can run it on digital dashboards, visualizations, big data modeling, real-time analytics, and deep learning. Since they decompress data storage issues, cloud APIs provide even more scalability than APIs. The cloud becomes the backend data infrastructure for Fintech companies.
Storing data on a server instead of cloud is challenging in terms of accessibility, trust, transparency, and data breach. So, when you store your customer data or any type of data in clouds, it will be easy to use for all Fintech. The path can be shared of the cloud’s data location and the user can follow it to read data, the computing becomes easier on the cloud and the institutions are not bothered with the running out of space and time.
How Are These Trends Benefitting Fintech As A Whole?
In a nutshell, we have realized that the inclusion of financial technologies is only a useful and convenient way of functioning. There are types of ground-breaking Fintech trends taking over the banking industry. these solutions are just to meet multiple needs such as transaction details, payments, savings, credit, and insurance. FinTech’s success is owed in large part to the technologies that play an important role in making their processes easier. There is no “one size fits all” for the finance business, you must change the approach and technology in order to advance in your business and leverage the best of technology. Your business can only sustain itself if you adopt the right technology and compete with other businesses making technology your armor.
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