The fintech industry gained an accelerated growth in the year 2020 due to the occurrence of the COVID-19 pandemic. The restrictions to physical contact and movements made many individuals opt for online financial services to carry out their daily transactions.
More users are making use of their smartphones and mobile apps to complete banking transactions and by the year 2022, it is expected that 88% of all banking transactions will be mobile transactions.
The stage is set for the fintech industry around the world and fintech is certainly developing faster and better in the coming years. It is important to understand the trends in this industry as they are quickly becoming the drivers of everything relating to money, payments and banking. Here are five trends that you should watch out for in fintech.
- Autonomous banking (Artificial intelligence and machine learning)
This is one of the trends in Fintech that is a major influence to the rapid growth that the industry is experiencing. Fintech is utilizing AI to develop solutions for users to help them make financial decisions and carry out transactions which are quite tasking.
This feature allows customers to easily delegate their various tasks to AI assistants who would be able to take care of different transactions for the consumer.
Autonomous banking would also largely close the financial literacy gap among users. These digital assistants are able to give vital information to users and help them make better decisions with their money.
- Digital banking
The traditional banking experience is regarded by many consumers as harrowing and stressful. Despite the increase in online banking services, it is still quite hectic for bank users.
In a report by Juniper research, online and mobile banking users will exceed 3.6 billion all over the world by 2024. This implies that the market for digital banking is on a steady rise.
With digital banking, banks can provide their services in real-time on multiple channels. Fintech solutions are more geared towards digital banking and more users are choosing to get on the digital banking train.
- Blockchain technology
The operations of the fintech industry have been revolutionized by blockchain technology. Through this technology, many transactions can be processed safely and securely. Many banks and financial institutions are taking advantage of what blockchain has to offer.
Business insider intelligence reports that roughly 48% of banking representatives are of the opinion that Block chain technology will have the greatest impact in 2021 and beyond.
Block chain brings in a new technology that focuses on minimal centralized processes by giving room for decentralized finance. It ensures secure cross-border payments and has minimum risk.
- Open banking
Open banking is a fintech solution that allows consumers to use Application Programming Interfaces (APIs) to make investments through third-party service providers.
The traditional banking methods only work with keeping people’s money but now, consumers are more interested in investing and open banking gives them that opportunity. Even though there are some concerns about security with this form of banking, awareness and collaboration across all parties involved would give consumers a lot of value.
- Robotic Process Automation
This is a form of technology that involves using software robots to automate processes that would usually be carried out by humans. The fintech industry employs RPA to reduce costs and improve efficiencies in the system.
RPA takes care of delicate processes such as security checks, trial balancing, accounts, customer onboarding and others. They allow financial institutions to be more efficient and give more attention to customer service.