Fintech is one such industry that popped up high even during the pandemic, do you agree? Well, it has been statistically proven that today as of 2021 there are over 26,000 Fintech startups worldwide. Even more impressive is that the number of fintech firms was only 12,131 in 2018 and 12,211 in 2019. So the fintech industry is growing by leaps and bounds, no matter what.
Fintech solutions have paved their way to our lives via dozens of applications. Also, if we see from the consumer’s perspective, they seem to be extremely happy about the fact that now they just don’t have an easy access to their finances but can also manage it seamlessly. From mobile payment apps like Square (SQ), Class A Report to insurance and investment companies, fintech has succeeded in posing a potential threat among traditional banking and finance institutions.
The following post reveals different Fintech industry trends to watch out for and along with that we will explore the latest fintech solutions that can be developed by a Financial software development company which helps businesses to scale their business.
Table of Content
- Latest Fintech Trends to watch
- Examples of Fintech Solutions
1. Latest Fintech Trends to watch
This or that, digital banking and fintech companies are anticipated worldwide to only keep going up. As a result, banks and financial institutions today are found making the most of financial technology. Further let us discuss the current hot fintech trends in the following post.
1. Artificial Intelligence & Machine Learning
Artificial Intelligence popularly known as AI is quite on a rage these days. Do you remember chatbots? The best client service software used by businesses to get in touch with their customers without them actually having to chat. Artificial intelligence, machine learning, and deep learning are such trends that enable fintech firms to segment consumers by what they need. For example, Imagine when you for the first time took any financial product into account. There was no credit history, no credit score or any signs indicating that you won’t get bankrupt so easily.
On that note, the importance of perfect credit histories and scores was observed when fintech came into existence. Though it might seem pretty a small aspect to neglect but quite an effective point. You see the actual benefit for such fintech patterns come from understanding the genuine reliability of the rest of the market and how one can draw in numerous great clients at rates that they can reimburse with unsurprising and sensible default rates
2. Autonomous Finance
Believe it or not, there was a time when financial service providers, as well as customers, suffered a lot as in-person transactions were out of the question those days. Thus, both the banking industry and the financial sector needed to come up with the latest development in fintech.
Money transactions are no longer the same as they were years back – all thanks to the ever changing digital revolution. Technically, the autonomous finance term revolves around self-driving funds. If you are seeking around for apps that guide its customers on making investments and managing unavoidable risks, Autonomous finance apps must be considered.
Moreover, it’s not just limited to businesses, even several banks and the financial sector can make the most of this trend. The loan approval procedures become faster at considerable interest rates.
Are you already thrilled and can’t wait to try?
3. Blockchain Fintech
The COVID-19 pandemic has been a turn on for several areas and blockchain technology or distributed ledger technology is no different. Several realistic and pragmatic approaches now are taken into consideration – again due to the pandemic effect. This includes the blockchain. More and more initiatives are taken on the basis of day-to-day business activities “to continue their growth path”. Some of the crucial benefits offered by blockchain technology among financial institutions include: –
- Fraud Prevention and risk management
- Independent client verification
- Trading process Automation
- Secure Payment Processing
- Smart Payments
4. Payment Alterations
Even Fintech comprises numerous variations when it comes to payments. Do we need to mention that Google Pay, Apple Pay are the trend-breakers! Here I would like to mention payments trends that are set to remain:
- higher demands for frictionless payment processes.
- Businesses, in particular, who are owning restaurants, or coffee shops or, fast-food chains and retailers counters will crave more cashless transactions.
- Apps for ordering drinks and food from tables rather than counters will be encouraged.
- Online banking and mobile banking usage by banking customers will continue to increase.
- Mobile and digital-only banking services will spread like a rage.
5. Biometric Security System
Mobile banking is now available literally at the tip of one’s fingers. Biometric technologies are based on measuring a person’s individual characteristics often known as biometrics. These features can be congenital (eye colour, fingerprint pattern) or acquired and changing over the course of life (voice, handwriting).
Biometric technologies were originally used at military facilities. Then, they began in airports, bus stands, metro stations, basically all the places which include mass gathering. Some of the popular trends of biometric technologies include:
- Face Image
- Iris Image
- Hand geometry
6. Robotic Process Automation (RPA)
Another recommendable fintech software development trend is Robotic Process Automation (RPA). As the name implies the technology is meant to automate business procedures. In other a significant amount of manual errors can be reduced if one decides to incorporate AI, ML, RPA into their existing operations. Right from financial services and banking to healthcare, telecommunications, manufacturing, technology, retail, consumer goods, hospitality, RPA is everywhere!
Do you think all the action sequences are performed by the hero himself throughout the movie? Of course not! There are stunt men who mimic the hero available. Similarly, RPA bots tend to mimic interactions and tend to accomplish monotonous tasks at a fanatic pace. As a result, businesses can free up manual labor and switch them towards the core activities. Not to mention by 2027, the RPA tech will reach $11 billion.
It’s benefits include:
- Enhanced efficiency and productivity
- Accurate outcomes
- Improved Security
- Improvised customer services
7. DIGITAL- ONLY BANKS
With the massive pandemic hit, there has been observed a severe change in the habits of a consumer. People no longer are willing to visit places whether it’s to shop or visit a restaurant or watch a movie, book tickets, make payments, all they want is to perform all these tasks simply by using their smart devices. And banking or managing their finances is no exception here. Digital banks have surpassed the way how conventional and traditional banks supposed to carry out tasks. Not to mention with the increase in digitalization, customers have become pretty much happy watching different banking organizations offering end-to-end services online. Some of its benefits include:
- Better convenience
- Enhanced security
- Full-control over finances
- Spreading Financial Education
- Incorporates tons of features such as tools to save, virtual assistants, etc
8. Fintech-Bank Partnerships
It is a safe bet to say that both fintech and banking sector are found redefining the meaning of managing your finances. Though there was a time when the banking industry did not take fintech seriously and were pretty much suspicious about it but not anymore. With the rise of digitalization, banks are no longer enrolled into processing papers all day long.
Now fintech firms are always in need for relevant cash flow and by partnering with banks they no longer need to worry regarding that part. It becomes totally out of question. Apart from constant cash infusion, stability, extreme market reach, better solutions can be gained with fintech-bank partnerships.
Businesses irrespective of their verticals are found looking for streamlining their ongoing procedures and banking is no exception. Here’s when Regtech comes to the rescue. Now what exactly is this? Well, it is said when technology is being used to process tons and tons of data in a short span of time. Today, advances and investments in regulatory technology (regtech) are increasing day in day out. Further let us see how Regtech offers substantial benefits across the globe. And more importantly, why businesses have already considered it to be the next big thing!
- Saves ample of time, energy and money
- Risk Management can be well-taken care of
- Exploitation can be significantly reduced
- Enhanced security
- Streamlining work management
10. Voice-Enabled Payments
Do you know how many words can one speak within a minute? 150 to 160 max and how many words can one type in a minute? 40 – 50 max. So which one is more beneficial? Of course, speaking instead of typing. Keeping the fact in mind, our next fintech software development trend is voice-enabled payments. There is no denying the fact that voice assistants such as Google assistants, Siri, Alexa, Cortana are growing at a fanatic pace.
- You can provide next-generation customer experience
- Enhanced KYC
- Say no to Fraud
- Log in/out, checking the balance, making payments, purchases can be made via voice
- Monitor finances
11. Quantum Computing
Quantum computing was once considered as a bizarre thought but fortunately not anymore. It has become a reality. Of course, this doesn’t mean there is no scope for uncertainty or fear but one has to step forward and take advantage of such disruptive trends or else you may have a lot to lose.
Based on Quantum’s theory, Quantum computing is carried out in the banking sector to streamline several complex data operations. Not just this, more and more financial companies are able to research on the present market and conduct predictive analysis regarding the same. You see it is impossible for a normal computer to predict probabilities precisely. No wonder, tech giants such as Google and IBM are found pretty much invested in Quantum computing.
It’s benefits include:
- Improved cybersecurity
- Fraud can be detected pretty much in advance
- Predictive analysis
- No downtime
- Automation leads to well-informed, precise and quick decision making process
2. Examples of Fintech Solutions
#1 Crowdfunding Platforms – I am sure you must have come across companies like Kickstarter, Patreon, GoFundMe and others that illustrate the range of fintech outside of the traditional financial services banking sector. With the rise of crowdfunding platforms, sending and receiving money has become pretty and much easier via the internet and app. This has led to the rise in the concept of pooling funding from different sources.
Gone are the days when we were compelled to visit traditional banks for loans, as one can easily visit the investor and get monetary support accordingly. Today it is safe to say that conventional banks have golden opportunity to grab the attention of the younger generation. By incorporating as well as embracing the digital world, it is possible to offer safe and easy crowdfunding solutions.
#2 Blockchain and Cryptocurrency – Another best example of financial services is cryptocurrency and blockchain. Cryptocurrency ensures a seamless buying and selling of crypto coins such as bitcoin. It’s more like Coinbase and Gemini
Blockchain technology Verify can also be used to reduce fraud. And All it requires you to keep provenance of your financial data.
#3 Mobile Payments – With the help of digital banking, financial institutions enables the movement of exchanging money and payments from via different mobile devices. Via bank account or linked card.including the popular payment app Venmo. For example, Apple (AAPL) – Get Apple Inc. (AAPL) Report and Alibaba (BABA) – Get Alibaba Group Holding Ltd.
#4 Robo-Advising and Stock-Trading Apps – With the rise of Robo-advising and stock trading apps, one can witness a sudden increase in efficiency and low cost. Due to algorithm-based asset recommendations, all this is achievable.
#5 Budgeting Apps – With the rise of budgeting apps like Intuit’s (INTU) – Get Intuit Inc. (INTU) Report Mint. Tracking income or monthly payments, expenses has now become possible for the end-users, irrespective of their mobile devices. Earlier, the scenario was like you have to come up with your own budget limitations, gather checks and keep an accurate track of your finances. . But at present, things have changed to a great extent especially with the development of financial services apps.
Today, consumers no longer are bound to do so as these apps significantly keep track of their income, expenses. All this has resulted in a great transition in the eyes of the end-users especially in regards to how they think of their money. Can Anybody use financial technology or is it just limited to banking and financial institutions?
Like I said earlier businesses would visit banks on the daily basis to obtain loans and financing. With the advent of fintech trends getting loans, managing finances has become more like a child’s play for businesses. All they need is significant mobile technology.
Apart from business to business, we have businesses to clients. Several cash apps like Paypal, Venmo, and Apple Pay are used for peer to peer transactions to transfer money with the help of the internet.
So that’s all for now! These are the top ongoing trends in banks and financial industry institutions. So what are you waiting for? It’s time to give a seamless, cashless experience to your users.