- July 14, 2021
- | 150
COVID-19 brought about changes to our lives throughout 2020 and will continue to affect us in the foreseeable future. Companies and people around the world have now understood the importance of tools that can be acquired only through new technologies. So the question now is how can seize this unique opportunity to create the future we desire?
The opportunities technology offers are numerous. In the coming years FinTech (Financial Technology) will undoubtedly be the driving force for the development of the global digital economy.
More specifically, for FinTech, the main emerging trends that will play a leading role are the following:
- Banking Partnerships:
In the market today, there is an imbalance between supply and demand. Many FinTech companies want to cooperate with banks, but few banks are well equipped to respond. A popular term (and service), Banking-as-a-Service, refers to the ability of a company, usually a platform, to integrate banking services into its offering.
Despite this possibility, such a cooperation can be characterized as difficult to fulfill, as the resources for the development of collaborations are limited and the integration of a large volume of banking data in the core of the platform is a rather time consuming process.
However, several emerging companies allow banks to provide a range of services to FinTech companies in a more modular way, thus taking small but valuable steps towards the cooperation that the market desires. For example, ACH is an electronic money transfer process that allows transactions between banks.
- Artificial Intelligence:
In the coming years, FinTech applications will continue to use artificial intelligence (AI) more widely than has been seen to date.
Whether it is chatbots that address customer queries, fraud prevention tools that verify the authenticity of documents, or analysis algorithms that analyze large volumes of data, the use of artificial intelligence in the FinTech industry will continue to grow significantly.
In combination with the constant evolution of Technology and digital media, financial institutions have the ability to provide their users with highly personalized services such as robotic investment advisors, etc.
By analyzing the current financial situation of the user and predicting his future needs and ambitions, FinTech companies will be able to plan and suggest the next best financial options that the user can follow, so that his future financial situation is defined as safe. As technology progresses fast, these kinds of services will definitely become ordinary.
- Open Banking:
Traditional banks have a very important role to play when it comes to safeguarding the depositors’ money. With the growing awareness of financial education, more and more people want to invest their money instead of keeping it in the bank.
Third-party financial institutions provide traditional banks with high-income investment services through open banking.
- Embedded Finance:
Embedded Finance is a new and emerging industry that merges the services of a non-financial provider with a financial service providing the user with a comprehensive experience.
It is very likely that there will be a strong increase in integrated financial management systems that manage spending, payment processing, budgeting and reporting for governments and other entities, and banking as a service.
- Autonomous Finance:
Autonomous Finance is one of the first on the list of new innovations. A service that can untie the hands of consumers and automate financial decision making using technology and machine learning and will for sure become an essential tool for any business.
- Voice Technologies:
Convenience is something that FinTech wants to bring to the world. The inventors of the industry want to give consumers the best services there are. Generation Z is at the forefront of technological trends and the products that this generation finds attractive, become direct successes. FinTech is taking advantage of this trend to make solutions more attractive with the introduction of voice technology.
Young people, having the tendency to chat with their peers a lot, are attracted to voice-based tools during their online interactions. The voice assistants that work with the use of technology offer comfort and simplicity in handling the tasks related to financial services. Voice technology also promotes secure payments using biometric data to approve a payment. The opportunities in this industry are endless as innovation is constantly thriving.
- Biometric Security Systems:
Mobile banking and other financial services are becoming widely available – literally at the fingertips of millions of users. This in itself is an incredible achievement, but at the same time raises many questions about safety. Meanwhile, cybercrime is increasing day by day.
Biometrics is the best way to achieve a fairly high level of security, giving users the confidence that their data is protected. At present, however, there are significant shifts in the biometric industry under the pressure of conditions.
Despite the widespread use of fingerprint reading for authentication, contactless solutions, such as face recognition or iris reading, will outperform those involving physical contact, further enhancing the user experience.
While the US and China will continue to dominate FinTech investments around the world, several financial technology centers will evolve and grow, especially in Central and North Asia but also in South America.
Catalysts for this development are the new openings to innovation by the regulators of these regions, the advent of digital banks, the development of the API (Application Programming Interface) and finally, the entry of new competitors in the Asian market supported by some major financial and technology giants of China.