The 21st century is the technological era. Technologies keep evolving. More and more technological advancement is observed in almost every sector of the industry. One of the major changes brought by technological advancement is faced by the financial sector. Financial institutions and banks see the constant increase in the need for implementing more technologies in the sector.
Through the past decade, we have already seen a lot of changes and challenges, though there are some major trends in the Fintech sector, which definitely are worthy of your attention and might actually prepare you for the further changes within the sector.
Many financial institutions have been struggling with meeting the demands of the customers. The main issue is the safety and privacy of customer information. To address the existing problem, the Platform as a Service (PaaS) has recently been introduced. It is the customized infrastructure that allows financial institutions to embrace the cloud platforms. PaaS has increased in popularity and has reached a reasonable revenue over the past two years.
The services include team collaboration, resource management, payment processing, and credit risk management. The increasing popularity of the platform has outlined the transformation of cloud computing and digital business trends.
Non-traditional Banking Services
The crisis in 2008 has left a significant footprint on the customer’s trust towards the financial institutions. It has led to distrust and many people have not recovered from it yet. The nontraditional banking services can offer plenty of opportunities for business. This is mainly due to the usage of transparency as a selling point.
Virtual institutions look to boost profits by offering supplementary services like financial tools developed from new voice technologies. Although it is very unlikely that the digital-only banks will replace the land-based banks, they will definitely have a significant impact on the industry by providing a more transparent customer experience.
Cryptos and Blockchain
Many financial institutions have been adopting blockchain technologies. Some of them are quicker than the others, but overall all of them are going strong. It has been reported that the money spent annually on blockchain technology within the financial sector is slightly over $1.7 billion. It is now not surprising that the rate is no how expected to be slowed down. Moreover, almost 77% of officials in top management positions expect to adopt blockchain technology as a part of the production system by the end of 2020.
Some countries are more actively involved in implementing blockchain technologies and cryptos in their system rather than others. One of the major players in the financial sector and market in Russia. Due to the massive oil production and being one of the major political figures overall, it has a significant effect on the financial market.
Russia has been in a constant love-hate relationship with the cryptos. Until the very last moment in 2019 when they finally came up with the “digital rights act”, which defines the usage of the cryptos, the rights of the consumers and stresses on the safety and privacy of the transactions. It is also one of the countries that can be finger pointed when it comes to the increase of USD/RUB rate, due to changes regarding the crypto regulations.
AI technologies have been used in many sectors already. With time passing, more companies, especially financial institutions are expected to use intelligent technologies. Some of the major benefits of artificial intelligence, machine learning, and robotic process automation are:
Decrease the risk of the loans, via using the credit decisioning model.
Smarter risk management, via using the predictive and proactive models.
More efficient operation, since the use of the data collection and analysis.
Using virtual customer assistant grants the customers a better experience.
Implementing AI in the financial sector will reduce the time and cost associated with workflows. Chatbots or VCA will also take over 25% of customer assistance and maintenance services by the end of the year.
Mobile Payment Options
While the worldwide volume of mobile payments is increasing constantly it is estimated to grow by 60% over the next two years. The mobile payment gives control to the customer’s hands. This new Fintech trend covers a wide range of payment methods. Some of them are the most crucial ones such as virtual currency and blockchain. Those types of technologies are called “internet of Payments”. The new trend also offers plenty of new opportunities.
Consumers will rally behind giants like Google and Apple with the more comfortable use of wallet free options.
The mobile payments will allow more people and companies to complete daily transactions without the inclusion of the banks. This also makes the payment method more accessible to people from all around the globe.
Payment options mostly use blockchain technology, which is so far the most reliable and secure technology for transactions.
Moreover, the brand new 5G technology has been introduced in many countries, which gives customers the ability to quicker and safer transactions from every point.
While there are way more trends to keep an eye on during this year, it is very important to take some of the majors into consideration, in case you want to make any realistic forecasts for the year. Fintech has become one of the major sectors throughout the past decade and is one of the most dynamic sectors as well, due to rapid technological advancement.