A Closer Look into Fintech Trends

Posted on May 24th, 2022

The potential of technology has emerged as a majestic superpower that we are increasingly dependent on in today’s world. Everything, or almost everything, revolves around these two words – finance and technology; the leading elements of this new age world, which symbolize the monumental scope of all that we can be and achieve.

Fintech, our shining star, has taken the helm of the structure of finance in these modern times. From purchasing products overseas, transferring money from one corner of the world to another, to making virtual and cashless transactions from personal mobiles, everything has become possible and easier, under Fintech.

And if there is one sector that was propelled forward during the pandemic, it is Fintech. Staying at home, and going cashless to avoid physical transfers between people, brought a compelling surge in this field. 

Fintech hubs worldwide are booming with innovative technology and are disrupting banking like never known before. Read on to find out more about the prominent trends in this space.

Neo-banks

Neo-banks are digital banks which exist only online entirely. This particular type of banking has been one of the major disruptions in the traditional banking sphere, because of negligible human interaction, allowing users to avail all kinds of banking services from any corner of the world with user-friendly interfaces.

This concept has widely been adopted by new and old institutions alike, where digital banking services like money transfers, account opening, KYC, and many more services are given as an extension to the prevailing ones.

Robotic Process Automation

An augmentation to digitalization and automation, RPA – Robotic Process Automation involves employing robotics or digital employees to work in place of humans to make several processes more efficient and increase accuracy.

The primary intention of engaging RPA in systems is to increase efficiency and cut down on costs which enables the RPA employers to focus their time and resources on improving customer services.

Blockchain

Blockchain technology has intrigued the financial sector because of the blanket of security that comes with it. This Avant Garde technology disrupts the centralization of procedures, making it possible to store data in a decentralized space, which is almost impossible to falsify or manipulate.

The level of security that comes with this innovative technology makes it possible to conduct transactions overseas safely, which is immensely appealing. 

Artificial Intelligence (AI) & Machine Learning

These prodigies of innovational technology have introduced us to the multitude of possibilities that can transpire when the human mind gets creative. Chatbots, market trends analysis, flawless cyber security, credit and loan resolutions, and customized services are just a few of the many breakthroughs that have materialized because of AI and machine learning. 

As more and more processes corroborate with AI, the extent of identification and protection against cyber threats remarkably increases and the operational costs of financial institutions go down substantially, making AI an indispensable pillar.

Biometric Security Systems

An extension of AI, biometric security systems are the coming of age of the brilliant concept of substituting signatures with more definite and secure options like fingerprints, facial and iris recognition, voice analysis, etc. 

This brings the structure of financial security to an altogether new pedestal, where personal information is corroborated with biometrics to create fool-proof cyber safety. 

Open Banking

This is the space where banks can join hands with third-party service providers, with the help of application programming interfaces (APIs) to enable transferring data and services between customers, banks, and third parties.

For instance, a customer could allocate powers to a third-party app to make transactions using their bank accounts which makes payments, standing instructions, and connections much easier and more convenient.

Regulation Technology

In this, technology is heavily employed to handle and monitor regulatory compliances, which enables systems to act in accordance with compliances, that could otherwise be omitted due to human error. Reg-tech versatility allows the same institution to adapt and change technologies according to jurisdictions and locations.

Gamification

Inspired by people’s fascination to get rewarded, financial institutions also have joined this corner, where they apply gamification strategies to engage their customers. The most prominent technique has been to give rewards based on transactions and the value of the customers. Some institutions also provide scorecards and/or badges when customers complete a particular task, like making 10 transactions using the bank’s app in a month.

Gamification has enabled a more profound engagement between banks and customers, where banks analyze and read the customers’ actions and provide incentives accordingly.

Final Thoughts

The emergence of Fintech started with tiny steps a little after 2012. Ever since then, the momentum of its expansion and adoption has only increased worldwide. Today, there are more than 26,000 Fintech start-ups bridging gaps and innovating relentlessly to make financial services easier and safer. Around 30% of traditional banking customers have adopted and received financial services from third parties and the number is only rising every day.

It would be appropriate to say that the storm of Fintech is not here to settle.

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