FintechTechnology

7 Technological Trends Which Are Changing The Fintech Industry

Man using laptop and phone to access banking

FinTech is a term that stands for financial technology and covers a wide range of solutions and businesses that implement innovation into the financial sector.

It develops rapidly nowadays thanks to the great request and new arising platforms. That’s why such positions as a FinTech developer are in great demand.

It is all about providing the most comfortable user experience and making FS more accessible and fast with the use of Artificial Intelligence, Blockchain, Big Data, Cloud hosting, etc. And it is especially essential now, as the COVID-19 pandemic has increased the use of finance apps globally. The investment in this industry also grows each year and in 2019 it has reached $137.5 billion worldwide.

As for today, 47% of TMT and 48% of FS enterprises have integrated FinTech solutions into their business models. It is safe to say that FinTech revolutionises banking and finance, that’s why it is exciting to see the new arising trends.

New FinTech Trends to Look Forward To

The arising trends are specifically shaped by new technologies and the opportunities they provide. Any FinTech developer is looking for such possibilities, whether it is the new security solution, cloud platform, or the best coding language for finance.

Using finger print on mobile phone to access bank app

Here are the most popular innovations to look forward to.

1.      Wide Use of Blockchain

Blockchain is usually referred to when people talk about cryptocurrencies. It is understandable, as because of it, the technology has become widely known. But at its core, it is extremely helpful for many other industries, including FS. It is a form of a decentralised solution that can power up many businesses that rely on contracts and fast data exchange.

It can increase the speed and safety of futures contracts, insurances, and other banking operations. It also helps to increase cybersecurity when it comes to identity data. It helps to secure both parties, a consumer, and an enterprise. It is also quite helpful when it comes to the speed of financial operations, like money transfers, investments, or payments.

2.      Biometrics for Better Security

No one is surprised now with a smartphone that has a fingerprint reading scanner. Biometrics is a perfect technology to ensure more security, which is essential for FS. With many solutions like payment apps and banking systems available via smartphones, more security measures are needed. It is also expected that more solutions will arise that do not require physical contact or touch but use biometrics.

3.      Digital Banks

This movement has already started and will continue to grow. Nowadays there are several online-only banks, such as Monese, Ally, and Monzo. They offer all banking services available digitally, without any papers and traditional lines. It is very convenient and fast. Not to mention, how much more comfortable it is than going to the physical bank. Also, online-only workflow allows decreasing many costs related to having a real-life bank. As a result, such entities offer more benefits to their customers, such as lower rates. And it is extremely flexible, as the only thing a user needs is a device (laptop or smartphone) to manage all their finances.

4.      Open Banking

Another important trend that is revolutionising FS is open banking. It is a perfect integration of new technologies and traditional banking business models. The main goal is to provide an easy and secure data network between different institutions. It gives access to third party providers about financial information. For customers, it means that all their stats and data can be consolidated in one place and managed easily. It will increase financial literacy and offer better opportunities when it comes to funds management or debt payment.

5.      Automated Advising

This is a perfect way to integrate AI and Big Data to offer robot-advising on the investment and finances to customers. It makes wealth management a service that can be given to any customer in need. Such solutions use advanced algorithms that analyse huge amounts of data to offer the best advice on the matter. Mostly, they are used for investment predictions and risks. They also include the person’s interests and objective in making a decision. The main benefit is that the algorithm is much more efficient in instant analysis of the trends and recent news than humans. And such solutions give private investors access to a wider data pool that they couldn’t previously get.

6.      New Lending Opportunities

Alternative lending is another promising sphere of FinTech that many people are using already. Overall, it refers to the independent lending platforms and services that offer money to borrowers, whether they are individuals or businesses. They are used especially by those who cannot get a loan from a traditional bank. Usually, such platforms are crowd sourced or sponsored institutionally. In the USA this solution has evolved to provide better opportunities to students regarding their loans. For example, there is a platform Edly that is designed specifically for students and schools to help finance education. Investors can also find opportunities to finance there. Alternative lending is predicted to grow as it gives more access to capital for those people who wouldn’t be able to get it otherwise.

7.      Digitalisation of Real Estate Mortgages

Real Estate is also no stranger to the implementation of the FinTech solution. It is one of the traditional industries that has become overly complicated and needs some refreshment. There are several ways how FinTech solutions can make it faster, and convenient. First of all, it helps to introduce rent-to-own solutions, like Divvy, for example. It is a new model of purchasing a house without a mortgage. In such a model, a client can rent and buy a house at the same time.

Secondly, FinTech gives more opportunities when it comes to buying Real Estate with a mortgage. It is not a secret that it is quite an expensive affair. New technology can offer a cash guarantee or serve as a guarantor between the client and the bank to release funds.

In Summary

The FinTech industry combines a wide variety of platforms, apps, and solutions that are used to make the FS sector more flexible, accessible, and fast. They are designed to provide the best user experience, make the traditional banking system more agile, and offer better capital and investment opportunities. 

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