FinTech trends, nowadays FinTech is experiencing a positive change in the world. This industry is progressing at a fast-pace to eventually help financial institutions, banks, and their clients who use their services to refrain from extravagant expenses and deal with their finances wisely.
The most significant transformation that has emerged is the developments of FinTech products & services designed for specific functions within the financial ecosystem, such as Reg-tech, robo-advising, and insurtech.
This blog will cover the top trends in financial technology or FinTech for 2021, but before that, let’s understand what FinTech is.
Understanding~ FinTech or Financial Technology
FinTech means finance & technology integration with a perspective to contributing & generating creative solutions for companies & assisting financial service providers in catering to their clients better. The technologies used, such as biometrics, artificial intelligence, Blockchain, eCommerce, and more, supports all this.
FinTech solutions can structure business operations by blending several software products into single digital ERP solutions. With new-gen secure mobile apps, users aren’t required to waste their time on everyday tasks. Sending notifications, tracking, & making payments, sending receipts or invoices become no issue with FinTech solutions.
FinTech renders you more opportunities to avail of new credit options, borrow money, & complete access to innovation. Seeking investors and mentorship in this sector is possible. Online product selling & services, getting digital payments in any form, & from anywhere that is feasible & legit for every party involved.
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Top FinTech Trends to Experience in 2021
1. Digital Banking
When a bank virtually renders P2P transfers, contactless MasterCard with free transaction fees, worldwide payments, and a chance to buy & exchange Ethereum, Bitcoin, & other cryptocurrencies, the financial industry notices fast.
Digital banks are beneficial – nobody needs to physically visit any bank, no lengthy paperwork to handle, and no line-ups for testing your patience.
Banking visits will decline to 36% from 2017 to 2022 due to the growth of digital banking. Other advantages include quick bill payments, feasible cost management, reset pins from home, quick balance review, and real-time analytics.
2. Biometric Security Systems
Mobile banking & their online financial services have become famous as they’re at one’s fingertip. This is a great achievement and raises many security queries while cybercrime grows day by day.
Therefore, every FinTech company must take all essential security measures & the biometric system is the best way of bringing security to the next level. It provides users the confidence that their information is protected. Nonetheless, currently, the biometrics market is encountering significant changes under the current situations.
Biometric sensors that include physical contact are anticipated to decline in popularity. Despite the whole development in the use of biometric technology for validating identities, contactless technology will take over the biometric fingerprint reader’s market.
3. Blockchain Technology
According to the Business Insider Intelligence reports, 48% of banking reps believe that the latest technologies like blockchain will significantly impact banking through 2020 & beyond.
Blockchain is anticipated to bring a global transformation in financial systems. It doesn’t just render new tech but also a new philosophy of decentralized finance that focuses on preventing centralized processes.
Blockchain product development has inspired the advancements of different online peer-to-peer financial platforms that let financial interactions occur in a more decentralized manner. It’s a distributed ledger tech that can enhance existing processes & systems. Banks are already using blockchain tech with the hope of lessening expenses & improving internal processes.
4. Neobanking 2.0
With over 75 challenger banks worldwide, this sector is becoming saturated, having virtual alternatives to branch-based banking that facilitate digital account opening without monthly charges. Competition is causing a demand for differentiating among neobanks.
The next-gen digital banks provide more than just debit cards and basic checking from apps focused on financial suggestions & credit-building to niche-specific platforms.
5. Artificial Intelligence
Since bank revenues are exceeding the countries’ incomes, they will undoubtedly embrace the AI at first. Nowadays, banks are honing their artificial intelligence solutions strategies, which will improve the greater acceptance of AI in the industry.
According to research, AI has planned to reduce the banks’ operating expenses by 22% around 2030, meaning that banks can have $1 trillion in savings.
AI has already become popular with the most efficient client service software using some intelligence systems like chatbots. FinTech institutions won’t be an exception, facilitating faster transactions & offering clients the feasibility they seek.
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6. Open Banking
This tech brings banks & financial tech together, enabling data networking across several institutions. The association of PSD2 (Second Payment Services Directive) makes banks understand their information in a secure and standardized form for data to be shared more simply among authentic companies digitally.
It allows controlling the banking & other clients’ financial data by 3rd-party apps through data sharing using APIs and AI. Several industry giants predict open banking is going to reconstruct the banking sector. Also, open banking reports to have generated $7.29 billion in 2018 and is forecasted to reach $43.15 billion by 2026.
The financial sector is regulated, and FinTech innovations need growth in Reg-Tech. This represents new tech solutions that improve and structure regulatory processes. Reg-Tech has transformed regarding the highest institutional demand that has emerged from the massive development of compliance expenses.
8. Payment Innovations
In FinTech, payment innovations have several elements, including contactless payments, smart speaker systems, mobile wallets, mobile payments, AI & machine learning for security, and recognition verification technologies.
Infographic created by Clover Network, a POS System provider
9. Autonomous Finance
FinTech apps are the main building blocks for autonomous finance. They revamp people’s interacting methods with money, thus becoming several people’s service choices due to their advantages.
Autonomous finance uses the power of AI and ML to manage users’ funds. Such apps evaluate the available options algorithmically & help users enjoy the most helpful ones.
10. Alliance for Financial Inclusion
FinTech ensures significant benefits not just to nations but to every client. The AFI foundation is an excellent step towards ensuring that FinTech does not leave out big industries as it shifts fast, changing the global economy.
The FinTech trends mentioned above help providers deliver greater financial services that allow improved financial data availability, quicker transaction processing, improved transparency, improved assistance for the client lifecycle, and more safe identity verification. The FinTech revolution is getting stronger, and you don’t want to be left behind.