As financial technology advancements become popular and widespread, many companies and business owners begin to ask if these will help their companies navigate risks while minimizing costs at the same time. From services being used to services being provided, cutting-edge Fintech trends might just change how people do business.
Nowadays, as chatbots are becoming mainstream and digital banks are making waves, customer expectations and regulatory requirements fuel innovation. The need for security, speed, and convenience is raised, but it's somehow challenging to incorporate this in the financial sector. But this changes as more and more organizations invest in technologies giving them a competitive edge in the market. Moreover, increased venture capital funding for Fintech startups spurs the newest wave of services.
The following are eight Fintech trends that can help your company gain more savings while meeting the expectations of valued customers:
1. Expanded Offerings of Platform as a Service or PaaS
Customers want convenience, but financial institutions find it hard to meet the demands while protecting information. As banks also comply with changing regulations, clients would benefit from the APIS opening to customer data. With Platform as a Service, institutions will be able to adapt to the changing needs with fully customized infrastructure allowing them to embrace cloud platforms completely.
This PaaS trend is seen to drive and reflect trends in continuous digital business and cloud computing transformation. It's also believed that more companies will be selling services to financial institutions to help them digitize their technology stacks and boost customer experience and risk management.
2. Non-Traditional Banking Services Become More Credible
The fall of banks sometime in 2008 has triggered customer distrust that numerous consumers have not fully recovered from. This gives room for more business opportunities considering that digital-only banks utilize transparency as their selling point. Nevertheless, the slow rates of adoption have beleaguered the industry. Based on a survey, less than 10% of those who participated in the survey will consider a digital bank. Virtual institutions boost profits instead by providing supplementary services such as financial tools.
Virtual banks often embrace the newest regulations and show flexibility. As expected, the confidence level of consumers will grow. While it is unlikely for digital-only banks to replace brick-and-mortar institutions, they will somehow pressure the industry to provide a more transparent experience to customers.
3. Increased Reliance on Intelligent Technologies
From the typical establishment testing advisors to modern assessing credit profiles, people will see companies expanding their smart technology use. The combination of Robotic Process Automation or RPA, Machine Learning or ML, and Artificial Intelligence or AI will offer numerous benefits to those in the financial industry. These benefits include decreasing loan default risks, smarter risk management, increased improvement in operations, better experiences for customers, and more.
4. Options for Mobile Payments Going Mainstream
Mobile payments are seen growing now and in the coming years. Mobile banking somehow put control to customers' hands while breaking down access barriers. Nevertheless, this Fintech trend covers a broad scope of payment options such as Blockchain and virtual currency. These are called the "Internet of Payments" by Fintech Times, and this changes how customers view fund transfers and banking.
Although customers prefer smartphone payments, those in the industry of financial services begin worrying about their technology stack handling minimized transactions. Nevertheless, the coming of 5G technology will make sure that networks will be able to handle more transactions and offer more reliable experiences. As an increased number of consumers leave their debit and credit cards behind, conventional institutions adopt digital payment. This feature tends to retain and attract more customers.
5. New Benefits from Blockchain and Cryptocurrency Innovations
There has been a slow movement towards using Blockchain, but this remains an important trend. But according to Greenwich's report, the financial services sector presently spends around $1.7 billion every year on blockchain technology. Blockchain investments are not expected to slow. Based on the data shown by PwC, about 70% of top management officials expect to adopt Blockchain as part of the production process.
People will see more fundraising for startups in the financial industry that are based on Blockchain. There will also be increased use of cryptocurrency technology across different sectors. With a smart move towards Blockchain as a Service or BaaS, both consumers and institutions can enjoy increased access to this advanced technology.
6. The Growing Use of Regulatory Tech or RegTech
Another important Fintech trend is the growing use of Regulatory Technology. RegTech makes use of artificial intelligence in automating risks management while at the same time providing big data insights. With the growth of data collection, regulations also increase, and with the heightened oversight, those in the financial industry realize and feel the burden of compliance with several new regulations.
7. Automation Distinguishes Financial Services
McKinsey revealed that there would be a second wave of AI and automation in the coming years where machines will perform up to 10-25% of bank works. This clearly means a faster and more improved banking experience for consumers. At the same time, financial institutions value error reduction and cost savings. Techs such as RPA software and machines make the repetitive and tedious data entry works more manageable. This enables companies to concentrate on improving customer service instead of being bogged by the collection of data.
Though the cost of startup for the robotic process automation software is expensive, the company will see around 40 to 100% ROI within three to eight months. The cost of running a robot per year to help with the automation is nothing compared to the cost you must pay to hire somebody to do similar tasks less efficiently. By allocating tasks or works to AI, companies can now divert their attention to satisfying the needs of customers with positive results.
8. Fintech Blend and Conventional Institutions Services
With the growing dependence on tech and the need for agility, traditional institutions continue investing and acquiring Fintech technologies. The rise in insurance tech and RegTech, including smart contracts, offer conventional organizations with means to minimize long-term costs and update infrastructure. Moreover, Fintech startups tend to capture more of the market through consolidation and strategic partnerships.
Aside from the trends mentioned above, financial translation services have also become trending and popular these days. You will need these services so that customers will understand you and they will feel more comfortable and confident to purchase products or do business with you.
