Top 5 Emerging Trends in Fintech to Look Out For in 2021
Finance is the fastest growing sector in the world, thanks to the continuous rise of tech innovations. In the past year, digital transformation received a new level of attention due to people shifting towards more accessible payment options due to the pandemic.
People are using fintech apps to access banking services at their convenience. Demand for such apps is not ending anytime soon, and it will continue to increase. As the number of people turning towards digital solutions to manage their finances will increase, the competition among the fintech companies competing for customers will also increase. Banks and other financial institutions are also adopting new ways of providing a better banking experience.
All this makes it more important for the fintech industry to embrace new technology trends that will shape fintech’s future. But what are the best technologies to use for a brighter future in financial technology? What are the trends to look out for in 2021? Let’s take a look at them.
1. Digital Banking is Here for the Long Run
Digital banks are banks that offer virtual banking services through mobile apps, and they lack physical locations. Some of the most well-known digital banks include HelloBank, Revolut, and Moven. The trend of using digital banks for making payments has gained popularity in a very short time. It allows people to make global payments, P2P transfers, etc., without the need to physically visit the bank, leave the comfort of their homes, or wait in line. All the finances can be easily managed with a single mobile app.
The recent surge in mobile-only banks has led to a decline in the number of people visiting physical banks. This number will continue to decrease, and the number of people who perform digital transactions will continue to rise, especially considering the pandemic. As per Global Market Insights, the digital banking market is expected to grow at over 6% CAGR between 2020 and 2026. It has created great opportunities for fintech that are already focused on simple, app-based solutions or will be focusing on it soon.
2. Rise of Digital Wallets
The past year has been challenging for everyone, and it has led to the constant use of contactless payments options in the Ecommerce landscape. People are using digital wallets to make secure and contactless payments. These digital wallets will soon replace traditional wallets as it is the fastest way to make payments. To better serve their customers, fintech companies have begun investing in digital wallet payments solutions. If your fintech company has not yet invested in this innovative payment solution, leverage this trend today and start investing in a digital wallet solution.
3. Safe Transactions with Blockchain Technology
Blockchain technology is becoming famous for ensuring safe transactions. More and more banks are saying that blockchain technology is the best way to make transactions secure. Based on a decentralized network, blockchain technology ensures that all data is kept secure and protected from unauthorized access. Banks are now leveraging the potential of blockchain technology to improve their Fintech future because of its advanced security features.
Blockchain technology is not just advanced technology. It is a new wave in the finance sector that focuses on enhancing financial technology. It provides end-to-end security for data and payments. Therefore, it is a good time for banks and financial institutions to invest in blockchain technology to improve their internal processes.
4. Using Robotics to Automate Tasks
Another trend that is taking the finance sector by storm, and we are likely to see it widely adopted in 2021, is Robotic Process Automation for automating day-to-day tasks. In RPA, machine learning & AI is leveraged to automate a variety of tasks. Many fintech companies use Robotic Process Automation to increase their efficiency, productivity and reduce operating costs.
RPA is not only beneficial for financial institutions in automating back-end processes like security checks, maintenance accounts, and credit card processing, but it is very useful in customer service automation. RPA also allows finance workers to finish their jobs quickly so they can focus on providing better customer service.
5. Artificial Intelligence (AI) and Machine Learning (ML)
Everyone’s known about Artificial Intelligence (AI) and Machine Learning (ML) for a while now. However, it’s only more recently that their applications for fintech and businesses of all types have become more widely adopted. They are two of the future trends in financial tech that will contribute to the industry’s growth.
Fintech companies are using AI to answer customer questions, verify the authenticity of KYC, etc. The AI Chatbots are now more intelligent thanks to ML. This technology allows Chatbots to respond faster to complex customer commands. On the other hand, customers can use an AI-powered Chatbot to manage their transactions, account balances better and receive the best investment advice. All fintech companies can leverage AI and ML’s potential for virtual assistants to resolve customers’ finance queries.
It is predicted that these five trends featured in the article will dictate the rules of the fintech and banking game in the future. So, banks and financial institutions can stay ahead in the game by embracing all these new trends in fintech.
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