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 firms was only 12,131 in 2018 and 12,211 in 2019. So the fintech software development industry is growing by leaps and bounds, no matter what. The following post reveals Fintech trends, how promising and resilient it is, and why fintech have become an exciting niche to get into right now?
Table of Content
- Let’s discuss more about Fintech
- Some of the Finest Examples of Fintech Solutions Include:
- Fintech Trends for Businesses
1. Let’s discuss more about Fintech
Though there are people who act as naysayers for the fintech industry. The reason being fintech’s definition keeps on changing at regular intervals. Earlier traditional banking systems were found hindered by legacy operating systems, capacity to innovate, agility and technology expertise.
Fintech has been used for many of the newest technological developments – from payment apps like PayPal (PYPL) – Get PayPal Holdings Inc Report or Venmo to even cryptocurrency. Combining the latest technological developments with financial services or applications, fintech has not just helped in providing digital banking solutions but also businesses – largely start-ups – disrupt the industry and provide better financial services to businesses and individuals alike.
Fintech solutions have made inroads with dozens of applications and have changed the way consumers access their finances. From mobile payment apps like Square (SQ) – Get Square, Inc. Class A Report to insurance and investment companies, fintech has disrupted traditional financial institutions and the banking sector – and potentially poses a threat to traditional, brick-and-mortar banks or financial institutions.
2. Some of the Finest Examples of Fintech Solutions Include:
2.1 Crowdfunding Platforms
You must have come across companies like Kickstarter, Patreon, GoFundMe and others that illustrate the range of fintech outside of the traditional banking sector. With the rise of crowdfunding platforms, internet and app users to send or receive money from others on the platform. This has allowed individuals as well as businesses to pool funding from a wide range of sources all in the same place.
Gone are the days when we were compelled to visit traditional banks for loans, it is now possible to go straight to investors for support of a project or company. More or less, the number of crowdfunding platforms have multiplied over the years.
2.2 Blockchain and Cryptocurrency
Another best example of financial services is cryptocurrency and blockchain. Cryptocurrency exchanges like Coinbase and Gemini connect users to buying or selling cryptocurrencies like bitcoin or litecoin.
But in addition to crypto, blockchain services like BlockVerify help reduce fraud by keeping provenance data on the blockchain. And while cryptocurrency and even blockchain may be somewhat controversial uses of fintech, they have certainly taken parts of the investment world by storm in recent years.
2.3 Mobile Payments
According to Statista, the global mobile payment market is on track to surpass $1 trillion in 2019. With the help of digital banking, financial institutions now allow consumers to exchange money and payments online or on mobile devices – including the popular payment app Venmo. For example, Apple (AAPL) – Get Apple Inc. (AAPL) Report and Alibaba (BABA) – Get Alibaba Group Holding Ltd. Sponsored ADR Report got in on the mobile payment business with Apple Pay or Alipay.
2.4 Robo-Advising and Stock-Trading Apps
Robo-advising has disrupted the asset management sector by providing algorithm-based asset recommendations and portfolio management that have increased efficiency and lowered costs.
With the rise of more advanced virtual financial services, various portfolio options can be analysed such as 24/7, financial institutions have adapted to offer online Robo-advising services – including the likes of Charles Schwab (SCHW) – Get Charles Schwab Corporation Report and Vanguard.
2.5 Budgeting Apps
With the rise of budgeting apps like Intuit’s (INTU) – Get Intuit Inc. (INTU) Report Mint. Consumers are now able to track their income, monthly payments, expenditures and more – all on their mobile devices.
Earlier, consumers had to create their own budgets, gather checks, or navigate excel spreadsheets to keep track of their finances. But after the fintech revolution prompted the development of financial services apps, consumers can easily and efficiently keep track of their income, expenses and other budgeting tools that have revolutionized the way consumers think about 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 including virtual banking services, businesses can easily get loans, financing, and other financial services through mobile technology. For example, CRM services like Salesforce provides B2B services that allow companies to interact with financial data to help improve their services.
Apart from business to business, we have businesses to clients. Several cash apps like Paypal, Venmo, and Apple Pay enables clients or customers to transfer money via the internet or mobile technology, and budgeting apps like Mint allow customers to manage their finances and expenses.
3. Fintech Trends for Businesses
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 the financial technology developing innovative technological solutions picked up momentum, found their niche, and empowered their business with one or a number of the fintech trends we’re about to discuss in the following post.
3.1 Artificial Intelligence & Machine Learning
Artificial Intelligence popularly known as AI is one of the most efficient client service software using some smart systems like chatbots and various businesses. Artificial intelligence, machine learning deep learning are such trends that enable fintech firms to segment consumers by what they need. For example, consumers just taking up their first financial product will not have a credit history, credit score, or other traditional indicators of being a good credit risk with a high probability of repayment.
One big insight of fintech is that it has developed in recent years is that profitability is not a matter of seeking out customers with perfect credit histories and scores. Though it might seem pretty a small aspect to neglect but quite an effective point. You see profitability for such fintech trends come from understanding the true creditworthiness of the rest of the market and tailoring offers that attract many good customers at rates that they can reliably repay with predictable and manageable default rates.
3.2 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 FinTech industry needed to come up with the latest development in fintech.
Today Autonomous finance apps are reshaping the way consumers interact with money online. Technically, the term revolves around self-driving funds. Autonomous financing apps will guide consumers on where to make investments and manage risks.
Moreover, it will be beneficial for the banks as well. The technology will be able to approve loans and set considerable interest rates. In short, autonomous finance apps use machine learning and AI to manage a user’s money.
3.3 Blockchain Fintech
The COVID-19 pandemic accelerated the digital transformation drive in many areas, and the blockchain technology or distributed ledger technology is no different. The pandemic has caused more realistic and pragmatic approaches to blockchain initiatives specifically focused on the day-to-day business “to continue their growth path”. Blockchain projects with clear benefits will do that next year at an even faster pace. Some of the crucial benefits offered by the blockchain technology among financial institutions include: –
- Fraud Reduction
- Trading process Automation
- Independent client verification
- Smart Payments
- Secure Payment Processing
Among the most popular fintechs which leverage blockchain technology are IBM-developed We.Trade, Stellar, Ripple, and Robin Hood (widely discussed in early-2021, amidst the Game Stop scandal).
3.4 Payment Alterations
There are numerous payment variations in FinTech. FinTech Payments Trends are contactless payments, mobile payments, smart speaker systems, wallets and more. Also, AI and Machine learning technology are used for security and identity verification.
Wallet payments such as Apple Pay, Samsung Pay and Google Pay contactless payment have become the biggest trends in fintech. Here we would like to mention payments trends that are set to remain:
- Customers will have higher demands for frictionless customer journeys and payment processes.
- Businesses, in particular restaurants, coffee shops, fast-food chains and retailers will encourage cashless payments.
- Apps for ordering drinks and food from tables rather than counters will be encouraged.
- Online banking and mobile banking usage will continue to increase.
- Mobile and digital-only banking services will become more widespread.
3.5 Biometric Security System
Mobile banking and other financial services have become widely available – they are literally at the tip of one’s fingers. This, in itself, being an unbelievable achievement, at the same time, raises lots of security-related questions. Meanwhile, cybercrime increases day by day.
Biometric technologies are technologies based on biometrics – the science of measuring a person’s individual characteristics. 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 in security systems at military facilities. Then, they began to be actively applied in airports, large malls, and other places of mass gathering. Some of the popular trends of biometric technologies include:
- Face Image
- Iris Image
- Hand geometry
This is not it, there are several other alternatives such as open banking, digital-only banks, voice technologies, RegTech in financial services, robotic process automation but the aforementioned ones are the top ongoing trends in banks and financial institutions.
On and all, FinTech is a revolution in the finance sector and day by day becomes powerful. So what are you waiting for? It’s time to give a smooth and transparent experience to your users through finance software development.