Shaping financial services in 2020: FinTech trends, technologies and shifts in demand
The cashless society is what many countries move toward their economies. Transferring money, depositing checks, applying for credit, raising money for a startup, and managing investments — nowadays, almost any transaction could be carried out without visiting a bank.
No doubts, financial software simplifies our daily operations. The delivery of financial services is now improved and automated so that both individuals and businesses can conduct their operations in a more comfortable and faster way.
Here at Selecto, we conduct a discovery phase before design and engineering work. When working on a financial app recently, we’ve discovered some changes and insights that we would like to share in this article.
Changes in the demand for FinTech apps.
With pandemic and most face to face arrangements brought online, in 2020, customers increasingly resort to digital channels. The global lock-down and social distancing regulations made service providers think of remote ways of doing the business. This transition to “online mode” could not but affect the finance industry as well.
Also, insane competition made financial service providers change the way they approach clients. Having a job done is not enough for their customers anymore. Pleasant experience along the way is what makes people love products and choose them again and again.
So what trends in the FinTech environment could we observe so far?
An unexpected rise of contactless
Cash had become the Payments Public Enemy №1 during the Covid-19 pandemic. To avoid physical contacts, consumers try to minimise touching anything at the point of sale. For instance, restaurant patrons insisted on using apps to scan a code to open a menu, make an order, and pay for the meal — all while people are sitting at the table.
E-commerce at the forefront
Click-and-collect is a trend that is best positioned to have staying power. “Beyond the 130% year-over-year increase in click-and-collect orders we saw in April and the 123% increase we saw in May, we’re also finding an influx in new first-time click-and-collect buyers,” Lisa Tadje, corporate communicator in Rakuten Intelligence announces.
The immediacy and security of immediate payments
Security and privacy are paramount to support nascent forms of digital transactions. Critical components of trust for new payment paradigms are solutions that use biometrics robust authentication connected with obfuscation technologies. Nowadays, speed, security, and digitisation are trends for the payments ecosystem.
Adoption of FinTech among older populations is up
In April, Fidelity National Information Services (FIS) saw a 200% increase in new mobile banking registrations, and mobile banking traffic ballooned 85%. Moreover, many senior citizens, for example, have reportedly become more comfortable with behaviours like paying bills online over the past six months.
New tricks at banks and credit unions
Nowadays, many financial service providers position themselves as more accessible alternatives to legacy institutions. But companies promising affordable services and a “customer first” ethos should prove their mission statements to become more than well-written marketing.
Technologies that contribute to FinTech.
Something always remains steady; these are the three primary drivers of FinTech. They involve technological innovation, the internet-savvy consumer who trusts FinTech companies more than their ordinary banks and government support. So what are these technologies that drive constant innovation?
Big Data and Data Analytics
Through large datasets, information about consumer preferences, their spending habits, and investment behaviour, the system can generate predictive analytics. The collected data also come in handy when formulating marketing strategies and fraud detection algorithms. Security is a top priority now.
Artificial Intelligence (AI) and Machine Learning (ML)
Machine learning has played an increasingly significant role in FinTech. The power of this AI-subset is in its ability to run extensive amounts of data through algorithms designed to spot trends and risks. Some of the fintech applications of AI and ML include credit scoring, fraud detection, regulatory compliance, and wealth management.
Robotic Process Automation (RPA)
Robotic Process Automation (RPA) stands for the process of assigning manual, repetitive assignments to robotics instead of humans to streamline workflows in financial systems. The most widespread apps of RPA are:
- Statistics and data collecting
- Regulatory compliance management
- Communication and marketing with the aid of emails and chatbots
- Transaction management
Blockchain
Blockchain technology is intensively applied due to its capability to store transaction records and other sensitive data securely. Each transaction is encrypted, and the chances of successful cyber-attacks are relatively low. This technology is also the backbone of many cryptocurrencies.
Final thoughts.
The digital age is rapidly pushing past the old world, causing immense disruptions in almost every business. FinTech keeps making daily financial operations more manageable, which in turn simplifies our lives.
Financial companies are coming out with innovative FinTech solutions to meet the customer’s needs and thrive in the financial market for a longer duration.
There is a saying among the financial business circle — ”Future of FinTech has never been so optimistic.” Nevertheless, everything is going to change soon! Though the global pandemic has brought severe challenges for FinTech businesses, yet it has forced them to reexamine banking activities and device new ways to come out strongly in the future.
