UBS Group developed a premium service that allows VIP-clients to get smart insights and forecasts about their revenue and expenses. It’s fair to say that 2020 has been among the most consequential years ever for the fintech industry. Thanks in no small part to a deadly pandemic that swept across much of the world, consumers, households and businesses alike have all had to depend on the digital world a whole lot more than at any time previously. Demand for fintech solutions has never been more intense—and that makes 2021 a crucial year for the evolution of this flourishing industry. This includes, for example, partnerships between fintech startups and large established players in the financial sector. We also continue to see many initiatives in payments, which saw growth after PSD2 was put into full effect in the autumn of 2019. One of the most significant recent developments is the rise of digital-only or Fintech banks.
In 2021, we will see more people and businesses sign up for neobanking, especially for tasks that don’t require visiting a traditional bank, such as money transfer or paying employees. Another banking and Fintech trend that you need to know is artificial intelligence and machine learning. Many services, such asdigital marketing services,have benefited from AI and MI. Financial technology has initiated solutions like mobile money and agency banking to improve financial inclusion in many regions of the world.
Technology is helping speed up improvements in the finance world, just as it is in other industries. The technology will be able to approve loans and set considerable interest rates. In short, autonomous finance apps use machine learning and AI to manage a user’s money.
Fintech companies used automated solutions to enhance e-commerce customer experiences, accounting workflows, and key financial processes. Open banking is another revolutionary technology that brings banks and fintech together by managing data networking across financial institutions. It is related to PSD2 that forces banks to release data standard format to make sharing information easier between the organizations digitally. Powered with AI technology and various third-party APIs, it controls consumer banking following financial information.
Typically, such applications are not banking products and they also don’t allow the issue of a debit card, make deposits or apply for a loan right in the app as API-banking-based apps do. To understand current fintech trends how open banking operates and differs from the Banking-as-a-service model, let’s review an example of financial apps that help plan the budget, analyze spendings, and optimize economic behavior.
A valid point, but it’s still unlikely that banks will risk their clients’ security only to introduce new cutting-edge technology. Reputation is everything, and the demand for voice recognition must push providers to make the banking experience better without sacrificing user security. Robots significantly improve customer experience, eliminate repetition, and reduce expenses. Compared to the salary of the in-house full-time employee, robot software “charges” employers nine times less not to mention expenses for company perks, vacations, sick leaves, etc. The quality of data processed and provided equals 99,5% accuracy almost eliminating the possibility of errors. They are much faster than humans due to automation of a big part of standard task performance. According to research, companies that apply robotic technologies for banking services gained an ROI of % during 3-8 months in 2020.
As the world is moving towards complicated systems, the boundaries between the industries become thinner and thinner. The thing is that it’s not just the fintech industry that is moving far beyond.
The number of fintech companies in Mexico grew 16% during 2021; there are already 512 https://t.co/5ddtlON5xE
— Trends Wide (@TrendsWide) December 6, 2021
Then came challenger banks and other FinTechs and showed that all things finance could be lightning fast, mobile-friendly, and affordable. Contactless and mobile payments are valued for their speed of transactions, convenience, and better security. More and more people tend to use biometrics to protect their payments and mitigate many of the worries User interface design connected with payment fraud. A great example of this is Mint, a personal finance management system that uses the information from bank accounts to help people track spendings. Banking-as-a-Service is the next big thing in the banking industry. BaaS, together with embedded finance (we’ll talk about it later on), refers to an API banking trend.
Banks that provide all their banking facilities online without having a physical branch or premise do not have to bear with long lines or excruciating paperwork. At the same time, clients will only need a PC or a smartphone to manage their finances.
If you’re looking for a reliable development company to make your ideas come true, MindK team is ready to help you with that. An Embedded Finance Infrastructure organization, in turn, acts as a bridge between financial and non-financial companies bringing value to both. Other emerging startups focused on FaaS and BaaS includeRapydand incumbent-focusedFintechOS. But one of the more promising and advanced examples of this technology isBBVA’s Mobile Interactive Assistantor MIA.
Even before the pandemic, global investment in financial technology had been increasing. Though with a slight drop in investments in 2019 with $137.5 billion compared to $141 billion in 2018, FinTech has experienced positive growth in most of its sectors. This new attitude among venture capital providers means that early-stage fintechs will not get the same warm reception that their earlier counterparts did.
Open banking, also called “open bank data”, allows banks to provide access and control of client banking transactions and financial data to other companies via APIs. Embedded finance allows integrating payments, loans, insurance, and even investment instruments into almost any non-financial service or product. For example, you can obtain a credit directly in an online store without the need to go to a bank or fill out any forms. For example, solarisBank is a pure BaaS provider that provides APIs to integrate digital banking services directly into different products. MIA provides an entirely voice-enabled experience when executing financial tasks like getting account details, sending money, or exchanging currencies. It’s even smart enough to give personalized suggestions based on the user’s habits. It’s a digital repository for a user’s payment information such as credit cards, rewards cards, and coupons.
Many people have started working from home and more banks are starting to take an interest in getting their customers to adopt digital platforms. Neobank is one of the main fintech trends in 2022, which is a bank without a physical branch, all services of which are provided online. The development of AI-based solutions is gaining momentum, becoming more and more complex. Experts predict that artificial intelligence will become the number one trend in the coming years. This technology can help brands understand a customer’s intention when they call, their behaviour, and their perception of the brand/product/service they’re calling about.
Every week in the U.S., around $100 billion of earned but unpaid income is held by employers, much of it from hourly workers who live paycheck to paycheck. While the mobile phones don’t need to touch the payment terminal physically, they must be within a few inches to transfer information through close-proximity radio frequency identification. Common examples of peer-to-peer transactions include grandparents sending money to their grandchildren or people at a dinner party sending their share of the bill to one friend who picks up the tab. With decentralized finance, intermediaries are eliminated, and finance is effectively democratized for the majority.
Seeking mentorship and investors in this industry is not impossible, too. Last but not least, new revenue streams are created within this framework. Selling products and services online, taking payments digitally from anywhere and in any form that is legal and convenient for all the parties involved – that’s the reality that financial technology is creating.
Data analytics is a great advantage for almost each and every industry we talk about – real estate, recruiting, or education. It means that working with data is an absolute necessity for any software product that plans to enter the market. But what trends are behind the current FinTech growth and which FinTech trends will shape the nearest future finance and FinTech? The popularity of FinTech solutions keeps on growing, and one cannot but take advantage of it.