More than 26,000 fintech businesses now operate globally, employing over 500,000 individuals. Nearly 30% of all banks clients utilize at least one non-traditional financial service.
In the financial business, fintech has become a buzzword. It has changed the financial industry in a variety of ways, from payments to advisory services. We've developed a list of seventeen technologies that are altering the industry to help you keep on top of all the newest innovations driving the fintech revolution.
1) Blockchain
The blockchain underpins Bitcoin and other cryptos. Nonetheless, there are a lot of obstacles to overcome before this technology can be broadly adopted. It's the tech that powers Bitcoin and other cryptocurrencies, but it also has a wide range of other uses.
Only two examples of how blockchain might disrupt the financial sectors are decentralized finance (DeFi) and non-fungible tokens (NFTs).
KYC crypto or Know Your Customer verification is required for purchasing digital cryptocurrency. The purpose of this process is to verify if the transaction has been made by the original owner of the account. The practice helps the company and individual from protecting themselves from any fraudulent activities. You have the option of purchasing cryptocurrency without KYC verification but it is too risky.
2) Internet of Things (IoT) and sensors
The Internet of Things is altering our perceptions of money and information. The fintech revolution is commonly cited as including sensors. Companies may now collect data in unprecedented ways thanks to these sensors, which are becoming increasingly widespread.
Sensors used in the financial services industry include ATM machines that can sense how many people are waiting to use them. Sensors can also be utilized in micro-payment transactions, allowing users to make tiny purchases without having to input their credit card information, as with contactless payments.
3) Digital banking and digital payment services
A Neobank is a new form of bank that operates solely online and is designed with mobile in mind. Instead of going to a real branch, customers create an account using an app on their smartphone. Neobanks provide a wide variety of banking options, such as savings accounts, auto or home loans, payments, and transfers.
Neobank apps, such as Monzo or Starling Bank in the United Kingdom, and Number26 in Germany, have been fast increasing in Europe and are frequently ranked higher than banks. To stay competitive, banks have invested $1 trillion (USD) in digital banking throughout the world, according to Forbes research.
4) Ai (Artificial intelligence) and ML (Machine Language)
There is a lot of research and use-cases in financial services when it comes to artificial intelligence. One of the most well-known fintech concepts is robo-advisors. The internet system can handle assets on its own and provide a tailored portfolio based on the user's preferences. They leverage cognitive computing technologies and big data trends.
Machine learning, which allows bots to learn and anticipate future client behavior based on past data, might help FinTech firms achieve this. Machine learning is a sort of a.i. that learns and improves from information in order to solve issues. Chatbots may learn from consumer chats and tailor future encounters accordingly.
5) Open Banking
People can share their financial data with other parties in return for new services and enhancements to existing data. Banks can link third-party APIs to their own financial platforms via open banking. Customers can pay bills directly from their bank account rather than having to remember another login and payment method.
6) Cybersecurity
Experts must create increasingly more inventive ways to preserve sensitive data as hackers find new security holes in systems. Even with the most advanced data security safeguards in place, hackers continue to find new ways to get access to critical data. For example, in the Equifax hack, attackers exploited a known vulnerability that the company had not addressed.
Threat security measures are increasing in tandem with the rise of cyber risks. Fraud management, (know your customer) KYC verification, (anti-money laundering) AML, and passwordless authentication are just a few of the difficulties that fintech firms face. Multi-cloud data storage, secure access service edge (SASE), and decentralization are important cybersecurity advancements.
Businesses have adopted the practice Know Your Transaction or KYT verification for verifying each transaction made by a customer. The process allows businesses to protect themself from any kind of fraud involvement. It is effective to prevent money laundering and scams. The process identifies the authenticity of the transaction and verifies if the transaction has been made by the true owner of the account.
7) Big Data
To feed predictive models, projections, and trading for organizations and people throughout the day, large market datasets and increased granularity are necessary. With the development of IoT devices, big data is becoming increasingly crucial. To handle the rising abundance of data, even classic data warehouse systems are being redesigned utilizing sensors.
In this brave new world, traditional data management methods have no place. If enterprises want to stay competitive, they must transition traditional data solutions into mobile apps, tablets, and smartphones. Unstructured data is becoming increasingly challenging to handle and capture since it is typically created on the move.
Businesses are finding it more difficult to grow their solutions across borders, thanks to regulations like the EU's General Data Protection Regulation (GDPR), especially as data privacy and analytics become more important. Compliance departments are under increased pressure to develop their Big Data projects while keeping client loyalty, especially as foreign corporations take advantage of global trade agreements.
Conclusion
Fintech is an area that is constantly evolving, with new trends developing every year. Discovering these top seventeen fintech trends will help you get fresh insights and remain ahead of the competition by allowing you to make informed business decisions for your company's future growth.
Author Bio
I’m James Watson and am a contributor and technical content writer. I have written on a broad range of topics and have a considerable number of articles relating to Artificial Intelligence, Machine Learning, Cyber Security, Fintech, Crypto, Finance and Business, etc.
