nahkodaweb.com - Back when we first heard about Bitcoin in 2009, many dismissed cryptocurrencies as simply a new fad, refusing to believe that the technology had the power to influence ancillary industries such as finance. Now, twelve years later, we are seeing technology, and not just crypto, integrating with nearly every area of the financial world, from payments to insurance to savings and everything in between. So much so that we take digital services for granted, but what comes next? Here are the top trends and technologies impacting fintech that we see today and how they will change the industry forever.
Trend
Driven by an increase in customers with access to computers or smartphones, both of which are powerful technologies, the financial world is adapting its strategy to offer services that are even more remote. By 2022, it is expected that the fintech market value will reach $309.98 billion, more than double the 2018 value of $127.66 billion. But this investment isn't just about the numbers. It goes much deeper into how the client interacts with the company and even defines business processes from staffing requirements and technology needs.
Contactless Service
There is no doubt that the challenges caused by the coronavirus pandemic are causing shifts in consumer behavior. Faced with the need for social distancing, businesses are taking on roles and adapting to the new reality at a speed never seen before. According to research by VISA, almost 33% of businesses now only accept contactless payments, with 78% of consumers also changing the way they pay for goods. For companies that want to stay relevant today, it will still be important to consider consumer needs and be ready to adapt to them.
Digital Society
According to Statista data, there are more than 6.37 billion mobile phones in use in the world today, up from 3.6 billion just 5 years ago. While it's important to remember that this number may not equal unique users, it does reflect a trend of increasing access to the digital world. This could provide exponential potential not only in the diversity of service delivery but also in providing access to the unbanked world. A closer look at finance, an industry that is deeply intertwined with our personal and business lives. In 2021, more than 52% of online purchases are made using digital wallets. Meanwhile, the use of non-cash payments increased by 32%, and this year (2021), digital payments may overtake cash payments for the first time. Society is becoming increasingly digitally oriented,
Automated Process
It has long been known that manual services are time-consuming and not always the most efficient for businesses. However, embracing automation is costly. Nonetheless, in recent years, companies have invested heavily in automating business processes in finance from back-end core functions to front-end services, from payments to loans. Automation not only improves efficiency but also improves client satisfaction due to the speed of communication, and in the long term, can reduce operational costs, leaving additional finances for future technology developments.
Technology
Knowing the changes in the industry as a whole, let's dive into the specific technologies that more and more businesses are adopting to increase efficiency and keep up with consumer demands.
Cloud Technology
In the past, businesses often had to invest not only in the cost of data storage technology but also in large residential systems, which used physical office space. And that's before we get into technology management costs and labor costs, or even the need to have physical access to data.
Now, with the potential of cloud technology, more and more financial businesses are migrating to the cloud. This provides agility in the flow of the world and offers employees greater potential to access work systems from wherever they are. However, it is critical to account for the cost and labor of transferring to the cloud and the ongoing maintenance required, making cloud migration serious decision businesses will need to face for years to come.
AI and ML
Artificial intelligence (AI) and machine learning (ML) are two computing concepts that are closely related but serve slightly different functions—AI accomplishes tasks, whereas ML focuses on learning from data. In the coming years, both will be widely used by companies looking to automate their services, provide smarter solutions, and, in general, improve their capabilities as a company. For example, AI-powered modules can easily calculate data and make decisions based on facts, not industry stereotypes, including the potential for lenders to offer individual loan rates, etc.
Module-based Solution
Since the start of the pandemic, more and more companies are using the financial element to help with service delivery. For example, POS (point of service) services, such as in-store loans, insurance, etc. For example, this year it is estimated that 38% of private loans in the US were completed through fintech platforms. However, not all businesses are ready or able to invest in fully customized software. In contrast, module-based solutions allow companies to gain new functionality that is easily integrated with their current systems without the hassle of developing it from scratch.
Blockchains
While we have heard a lot about blockchain technology in terms of cryptocurrencies, in the coming years, we will see a lot more of its true potential. Blockchain is, at its core, a secure system that allows transactions — not just finances — to be carried out. For example, such technology could be used to support the growth of the peer-to-peer lending industry, which will grow to a value of $1,000 billion by 2025.
How Should Companies Invest To Take Advantage Of The Latest Trends?
For businesses looking to stay relevant, upgrading their current technology stack is a must. However, it is important to remember that not all 'trends' are appropriate for every business or industry.
Making plans, conducting market research, consulting business analysts, and experimenting are important steps of digital transformation in financial services.
To get the most from the growing potential of technology, it is important to connect technology to the basic business needs of your business and upgrade intelligently based on strategy, not technology trends.