With the exponential growth that this sector has witnessed in the past five years, it has surely painted a strong road ahead for its customers, providing a more convenient experience while mapping their demands and behaviour.
The Pandemic has sped up the adoption of technology many times over. When economies had to shut down due to the virus, technology played a key role and it has changed the landscape for the long haul. It provided various sets of tools to keep our work running in all sectors and regions of business. According to McKinsey, companies have accelerated the digitization of their customer and supply-chain interactions and of their internal operations by three to four years.
Especially in the fintech industry, traditional issues and system errors that have been persistent for ages are now being eliminated with various software and technology solutions while providing a successful end-to-end journey for the customers. With the exponential growth that this sector has witnessed in the past five years, it has surely painted a strong road ahead for its customers, providing a more convenient experience while mapping their demands and behaviour.
Here are the top 5 emerging technology trends in the fintech industry that can make customer’s life more efficient:
The first wave of Fintech was dominated by digital payments, InsurTechs, and property management whereas the current wave is led by Neobanks or digital-only banks. Typically, Neobanks are digital entities, without any physical presence. The most important thing for digital banks alone is that a brick & mortar branch is not necessary, you don’t have to wait in long queues, or go through too many documents. The risk capital & private equity investors have started to invest significantly in new banking companies like Neobanks, and Fintechs that will thrive over the next decade will be those with proven business models and monetization capabilities built at scale.
AI-enabled Financial Institutions:
We are in the technological age where AI makes lives easier, not only for the user but also for the employees. AI-enabled software helps build the right business strategies for the institution based on the issue or situation faced. As cybercrime, financial fraud, and other such incidents increase, it becomes difficult to detect, track and address them manually. This is where AI steps in. It can help in quickly raising an alert for such issues within seconds of detection. Moreover, AI-Chatbots help reduce repetitive tasks such as handling simple
queries posted by customers that can be easily found in the FAQs. AI also helps in reducing operational costs and increasing productivity.
Digitization of Banks:
Although various banks have their own apps available in the app store that smoothen monetary transactions, you still need to physically visit the bank for certain key tasks which are different for different banks, for example, opening an account, updating key contact details, etc., if the bank’s app doesn’t allow it. With the latest technology, we will be able to see the digitization of banks where every transaction or any step that we make can be done online over web or phone apps. There would be no requirement for a physical presence for these tasks. With the increase in contactless payment systems, digital banks would be the most significant trend in the fintech industry that would provide the ultimate experience to the user.
Emerging Tech Companies:
Many tech companies have been popping up in the financial service sector ever since the pandemic bound everyone to their homes. From technical services that help create ledgers to predictive economic models and other such offerings, tech companies are now making financial services easier with software and other tools. As the services are available in a mobile app format, it is accessible to everyone who has a standard smartphone.
Blockchain for Security:
Blockchain in the banking industry is another trend providing suitable security in the age of frequent cybercrime and frauds. Blockchain technology analyses data collected by financial institutes to detect fraud and fills in the loopholes that may cause the breach and other risks. This technology not only improves the security of a bank but also increases the efficiency of the institute.
The application programming interface (API) has been a key part of software development for decades as a way to develop for a specific platform. BaaS, at its core, is an on-demand service that enables users to access financial services over the internet. It is enabled by the seamless integration of financial services and products into other kinds of customer activities, typically on non-financial digital platforms via the APIs. BaaS is an opportunity to reach a greater number of customers at a lower cost. The traditional banking model is based on expensive legacy technology and operations. But now, the cost of acquiring customers is reduced by almost one fifth. This allows the service provider to open up new ways of serving customers, and have many many more cross selling opportunities. There are also ways in which BaaS and Blockchain technology can help customers stay safe against cybercrimes as they work on delivering a fast, secure, and highly resilient online banking system. BaaS provides Financial Services and Fintech companies a way where they can provide speed, security, and resilience and run their core banking applications on a robust network infrastructure, fully compliant, fully automated; ready to go at a push of an API button.
These trends will take the fintech industry to new heights, providing consumers with seamless experiences with unmatched accessibility. With constant technology evolutions, we will see more new opportunities emerge in the fintech sector transforming the way businesses are run and managed.
Source: Business World