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The financial technology industry is probably one of the few sectors in business that have managed to escape unscathed during the COVID-19 pandemic. If anything, the FinTech sector has experienced significant growth with some estimates pitching it as the fastest-growing sector worldwide. The reasons behind the growth are easy to guess. As the pandemic took hold, a majority of the populace shifted to digital payment systems and other fintech solutions almost overnight – including people who have long stayed away from digital transactions to address their financial needs. As they started using the systems, consumers also quickly realized the benefits of the convenience offered by FinTech and the lower transaction fees associated.
The Global COVID-19 FinTech Market Rapid Assessment Study reported that the total number of digital transactions and new customers in the UK and Europe has increased by 17% and 21% respectively, year-on-year. Cumulatively, the global fintech market was worth $127.66 billion in 2018, and is growing at a CAGR of 24.8% through 2022 that will catapult it to $309.98 billion. Within the same time frame, almost 78% of the United States millennial population are expected to become digital banking users. Needless to say that fin tech will be an exciting space to watch out for both at the present and in the near future. In this article we will explore the key technologies shaping the future of fintech. IT Outsourcing Houston also offers extensive resources on how each of these technologies can help your financial company perform better.
Key Technologies Shaping the Future of FinTech Industry
The rise of digital or virtual banking
Digital or virtual banking services are the flavor of the year. It’s rising popularity suggests that people are keen to move away from the inconveniences attached with traditional banking such as long wait times and poor customer service. Thanks to an evolving list of technologies, digital banks are now safer and more accessible than ever. With digital banks or virtual banking, consumers are now empowered with more financial knowledge, information and transparency than ever and can conduct even complex transactions at the click of a button. Routine tasks like bill payments etc. can be easily automated with standing instructions that can be tweaked whenever the user needs to.
Blockchain is the foundational element behind safer digital financial transactions. Blockchain technology works on the basis of decentralized networks, and eliminates the need for third parties for execution. This ensures that data remains safe from unauthorized access. Because of the recent spate of attacks targeting financial institutions, the advanced security features offered by Blockchain can literally enhance the future of Fintech. Blockchain essentially eliminates the threat of data theft once the data is recorded, thereby preserving end-to-end security of data and payments. Managed IT Services Houston can help fintech companies leverage blockchain technology to ensure the safety of your data.
Robotic Process Automation to Automate Digital Tasks
Robotic Process Automation is another foundational technology that is expected to have a major impact on the financial industry. This utilizes digital robots to automate daily routine financial tasks thereby helping financial companies improve overall productivity and efficiency and significantly reduce costs. Using RPA, financial companies can easily automate extensive and complicated back-end processes such as security checks, account upkeep, credit card processing, and more. Moreover, RPA enables financial industry employees to focus on higher quality tasks and deliver better customer service as routine tasks get increasingly automated.
Artificial Intelligence (AI) and ML (Machine Learning)
AI (Artificial Intelligence) and ML (Machine Learning) combine to create a host of exciting new technological opportunities and solutions for long-standing issues in the financial industry. The most prominent example of this can be witnessed in the increasing use of virtual assistants and chatbots to help customers with their finance queries and requests. Thanks to technologies like ML, AI Chatbots can be further fine-tuned to more intelligently respond to customer needs and execute complex commands faster. Conversational digital assistants have been proven to be very beneficial in improving customer engagement metrics at financial institutions. Customers can even leverage these to learn more about specific product offerings and get necessary financial advice about specific situations. Even more promisingly, ML also enables companies to examine credit data carefully, study customer behavior, and predict loan repayment rates and more. Local fintech firms can learn to leverage both these technologies better with the help of IT Support Houston.
While the convenience offered by digital banking services cannot be denied, the specter of security concerns continue to haunt fintech for banking. Ensuring the integrity of their security measures will be the cornerstone for the future of digital banking services. This is where a security system designed on the basis of biometrics can become a fool proof long-term solution. The benefit of biometrics is that it can ensure the peace of mind for both users and financial institutions that their data integrity will never be in question. While biometric sensors that require physical touch are likely to get phased out eventually, contactless biometric solutions may be the path ahead for securing the Fintech Future.
Contactless and secure payments
Irrespective of the length of the current pandemic, it is likely that contactless payments will remain in vogue in Fintech Trends in the near future. Usage of digital wallets are on the rise that allows people to move away from physical wallets. As fintech companies continue to innovate and evolve their offerings in digital wallet payment solutions, the appeal of contactless payments is likely to only entice more customers.
About Scott Young:
Scott Young, is the president of PennComp LLC, an IT Consulting Houston company. Being a CPA, Six Sigma Master Blackbelt, Change Management Certified and Myers Briggs Qualified, Scott’s expertise is reflected in PennComp as a leading IT company for computer services and network integration. PennComp utilizes Six Sigma methodologies and practices in their service delivery and offers state-of-the-art monitoring and management tools to their clients. His blog can be found at https://www.penncomp.com/blog/.