The financial industry has changed dramatically in recent years due to technological advancements. Innovative companies are introducing fintech development trends that are constantly evolving to push boundaries and offer better services for consumers. For example, many people can now complete a transaction on their PC, phone, or tablet without going into a bank branch or filling out paperwork. By 2022, the number of Americans using digital banking will have increased by 4.3%, from 61% in 2018. This is partly because of the coronavirus pandemic. According to The World Bank, the development of fintech applications proliferated during the pandemic period.
The finance industry will never be the same again. To keep up with these ever-changing times, businesses across all industries need to stay on top of trends that will significantly impact them. Here are some recent developments in fintech that you should know about if you’re looking to thrive in the future.
Among the most crucial trends in fintech is blockchain technology. It helps make the banking sector’s records secure and safe. This is necessary today more than ever because of regulations like GDPR and the SEC rule 17a 3. Therefore, various cyber crimes are eliminated. Blockchain helps the business to be more accessible, comprehensive, and secure. Besides being an innovative technology, blockchain also is built on the philosophy of decentralized finance. It focuses on the minimization of centralized processes and procedures. Various banks and financial organizations have embraced blockchain and have invested in this technology.
Machine Learning & Artificial Intelligence
Every technology incorporates AI and Machine learning on its platform. This is because the two have unmatchable growth and power. AI-powered chatbots have become more intelligent with the help of machine learning. They are used in various applications in the banking or financial sector like customer interactions, as digital assistants, investments, and digital payments. Expert systems in the financial industry are being used to render various services like a customer’s suitability to get a loan and analyze various stock markets. It is all with the help of artificial intelligence.
Robotic Process Automation
The other trend to be aware of in financial technology today is the use of automated robot software. These bots can engage the clients 24/7. Because they are highly accurate, the bots reduce human error and give the correct instructions. Financial institutions adopt the RPA in managing their backend work like maintaining the accounts, trial balancing, security checks, and credit management. RPAs improve the way financial institutions invest, provide better customer services, automate and improve accounting, and enhance productivity.
The other revolutionary and exciting feature in fintech is open banking. Both fintech and banks are brought together by promoting the networking of data among various companies, a feature related to the Payment Services Directive 2 (PSD2). Through open banking, banks are forced to release the data in a standardized and secure form. Therefore, the sharing of data is made simpler within authorized organizations over the internet. It also helps control the consumer’s banking information through third-party applications by data sharing with APIs and AI.
It’s clear that the fintech industry is a quickly evolving space, and new trends are popping up on a regular basis. Financial institutions need to be on their toes and ready for changes, or they may fall behind in this competitive industry that’s become more digitalized than ever before. Learning about these trends can help them stay ahead of the curve and provide a better service to your customers with less effort. The future looks bright for those who are willing to adapt.