There are more than 12,000 Fintech startups worldwide.
It will not be wrong to say that among many industries, the Financial industry is the one that has seen huge innovations in recent years by using technology. Apart from that, the new buzzword “Fintech” is becoming commonplace in the sector and with an ever-evolving corporate and consumer focus, the need to keep up with new updates and advancements for improved user-experience is a priority.
This is the reason, new technologies in banking are already revamping the financial sector and the traditional banking landscape is all set to change in the next few years, which altogether are set to mark the future of fintech in a revolutionized way.
There is a whole lot of things that are transforming the future of fintech and banking sector be its safety features- advanced cryptography, biometrics, remote applications helping customers to avail the banking service without the need to visit the bank branch, smartwatches, etc.
Technology clad FinTech has changed the way people use to think about money and value exchange in real-time while adopting the habit of digital transactions and carries the capability to change fintech in the future that too in a great way. Seeing such transformations in the sector, along with Paypal which was already in the game for a long time, relative newcomers like TransferWise, Zelle, Venmo are also coming in by revolutionizing money sharing interactions.
With technology, the sector is going to evolve in a better way while offering user-friendly experience to customers. So, without further ado, let us see what are the upcoming technologies that are going to affect the FinTech domain-
Upcoming Technologies That Will Affect The Future Of FinTech
No doubt, upcoming technologies will be more customer-centric and efficient while providing more targeted, intelligent and secure solutions that will together answer the burning question- what is the future of fintech. With technology as the driving force in the future, organizations will be able to redefine themselves to be more competitive and responsive to marketplace needs.
According to IBM, more and more banks are shifting towards enterprise-wide hybrid cloud strategy as banks will get the dual advantages of private and public cloud along while addressing data security, compliance, and governance.
Also, the advantages include reduced costs, improved operational efficiency, and more enhanced innovation.
API based Platforms
The smart combination of open platform banking and open APIs will ultimately change the entire banking ecosystem starting from the products and services offered to delivery channels. Through public APIs, it will become easier and more convenient for customers to interact with their respective banks.
Here, the banks will pose as a platform, on which third-party companies can build their own applications by using the bank’s data.
Robotic Process Automation
With the help of Robotic Process Automation, Banks and credit unions have accelerated their growth while executing pre-programmed rules that too across structured and unstructured data.
The intelligent automation offers processes the power to learn from prior decisions and data patterns in order to make decisions by themselves. The decision could be about reducing the cost of administrative and regulatory processes by at least 50% while improving speed and quality.
Furthermore, these automatic processes in the banking domain also simplify compliance by keeping detailed logs of automated processes while generating reports an audit might need to see automatically along with eliminating human error.
Being intuitive and easy to re-configure software robots at any time, adjusting the process to fit new or maybe updated regulations is never difficult.
Easy Instant Payments
Technology has changed the way consumers and businesses make transactions.
Despite the lack of immediate payment infrastructures, there are still instant payment options available in the market for the users who are going to affect the future of fintech. And mobile applications are one of the handiest ways to do the transactions which in turn creating a sea pool of opportunities for fintech based mobile app development companies. Meanwhile, the availability of instant payment options provides banks an enticing opportunity for achieving speedy consumer transactions while increasing the overall customer satisfaction.
Furthermore, through the integration of instant payment options, the transaction can be made digitally instead of cash. In some countries, banks do offer immediate payments actively market apps to their customers whereas, in some other countries, banks do partner together to offer immediate P2P payment experience to a wider customer base.
When one says how ai is transforming the future of fintech, the answer lies in – Artificial Intelligence has created a different aura for business needs. The growth of structured and unstructured data, availability of new technology like machine learning algorithms, cloud computing, great pressure from the new competition along with getting constant stress of increased regulation and heightened consumer expectations have created an “apt environment” for the expanded use of AI in financial services too.
And there are numerous advantages of AI integration in the banks and credit unions which include- back-office operations, customer experience, product delivery, risk management, compliance, etc, which are making fintech in the future a mandate need. Through AI, banks can check out histories of data for every decision made.
Meanwhile, AI looks like fear for those who have not adopted AI until now.
Here you got a bonus- how AI is revolutionizing the Fintech domain.
There are many banks that are adopting blockchain in fintech market for improving efficiency while offering cost-effectiveness and better security throughout the entire spectrum of financial services.
Meanwhile, there are some financial institutions that have started testing the use of blockchain for inter-bank transfers while others are testing it in for payments operations, fraud reduction, knowing the customers and for loan processing, ultimately going to brighten up the future of fintech.
This is how blockchain is changing the future of fintech industry as with it, the flow of transactions will become smoother, clearer and absolutely hassle-free.
With the advancements in technology and techniques, cyber risk is also emerging in a unique and hard to crack codes way while making typical approaches to risk management lifeless and inappropriate.
The situation is alarming, hence to cut it in a more strategic way, advanced analytics, real-time monitoring, AI and other tools are coming forward to detect potential threats along with stopping them before they finally strike.
Though digital disruption is required but it does come up with new risks but prescriptive security may improve its effectiveness.
Apart from the traditional financial data collection, new data sources like mobile banking and the Internet of Things (IoT) are providing additional layers of data gathering, which will together be going to space the future of fintech.
By combining these technologies with Artificial intelligence, Big Data analytics can utilize large amounts of old and new data in order to find out hidden patterns for fraud detection and risk management.
This is how big data will affect fintech as banks can get an understanding of customer behavior to create better and more customized products and services.
Biometric technologies are the ultimate solution to data safety and security. The technology is meant for analyzing the unique features of an individual like fingerprints, voice, retina, face, and other forms of recognition in order to enhance security and identity verification.
With the help of better and advanced devices equipped with better sensors, banks can safeguard their users, their data while preventing cybercrimes and identifying theft better and before a big mishap.
This RegTech works as a service and tools by using Big data and cloud computing for enhancing the ability to monitor, report and comply.
Thus, banks by using this technology can also reduce the risk of frauds along with perfecting authentication process and identity management that will highlight the future of fintech in a better light. In short, RegTech can help banks to increase transparency and consistency while lowering the cost of compliance.
5 G is one of the most prominent parts of the technology trend that is likely to change the economy. This technology will transform mobile banking with higher data speed while greatening signal efficiency.
Sticking to the payment method then payment technology could evolve rapidly with 5G along with penetrating the wearable market too.
ATMs have made life easier since they were first introduced in 1967. With constant changes in technology, the next revolution in ATMs will involve contactless payments much like Apple Pay or Google Wallet.
Some of the ATM innovations are also available today like Biometric authentication in India, and iris recognition at Qatar National Bank ATMs. the technology can prevent issues of ATM hacks, sort of another victory to mark the future of fintech.
Smart wearables are the talk of the town and they are poised to become the future of retail banking experience too, another addition for brightening the future of fintech.
One of the most viable examples is- Bluetooth beacons can push personal greetings to customer’s smartwatches when they enter a banking location.
An increasing number of remote technologies will offer users to interact with the bank right from the palm of their hand and also from the emailing system by eliminating the need of visiting the bank branch etc. and this is where designing for wearables becomes the mandate need.
So, this is how will fintech change the future of fintech. Also, point to be noted here is that- FinTech is of vital importance for the finance sector to explore and understand new opportunities and challenges.
Meanwhile, if you have any queries or need assistance, feel free to contact our team of fintech experts for more details.
Co-Founder and VP Mobile Architect at Appventurez. An expert programmer who is passionate and loves to explore emerging mobile technologies. As a leader, he is a perfect match as he is always there for the team to help and guide them to learn and implement smartly and effectively.
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