Over the past few years, we’ve seen the fintech industry take off. For those who may still not know what fintech is, it’s simply a combination and shortening of the words “Financial” and “technology”. The industry has revolutionized banking and financial services, facilitating quantum leaps and changing the paradigm at every turn. Great examples close to home are FriMi and Nations Mobile Banking, which allow for a fully-fledged banking experience on any smartphone.
But fintech isn’t just revolutionizing the customer-side experience, it’s upping the experience across the board for all stakeholders. It’s empowering banks and financial services providers to be the best they can be. It’s creating a win-win situation for all (who’re willing to embrace change).
Many fintech trends have emerged and some have passed, but in this article, let’s look at five trends that are set to have a global impact throughout 2020 and possibly beyond.
Mobile Payments
Wouldn’t you like to leave your wallet at home and just take only your phone? Well, that dream is already here, in a sense. Global mobile payments platforms like Google or Apple Pay, and FriMi here in Sri Lanka, are now widely accepted. And soon, once acceptance is wide enough, you will be able to leave your wallet at home.
In fact, it’s now feasible to imagine a truly cashless future. Countries like Sweden are leading the way, where even the homeless can accept electronic cash donations. Social platforms, such as WeChat in China are now also beginning to allow funds transfers and, in Sri Lanka, mobile network service providers have long provided methods for mobile payments.
Platforms like FriMi are now integrating a full and rich digital banking experience with these services, enabling them to act as lifestyle and financial partners for users. The ultimate goal is to condense each user’s entire financial life into one conveniently accessible portal. Mobile payments platforms are also highly secure but still convenient thanks to biometrics, making them much safer than carrying cash.
Robotic Process Automation (RPA)
The backend work of financial institutions is often repetitive and many processes can now be streamlined. Robotic Process Automation has become a popular solution for this, helping financial institutions to be more efficient, effective and compliant with regulations. Modern RPA solutions are even capable of machine learning and can observe what humans do and then automate and or suggest improvements to processes. Robotic Process Automation will only become more popular in 2020 and beyond for processes such as onboarding, security checks, data analysis, risk assessment, verification and other repetitive administrative tasks.
Conversational Interfaces
Most banking customers today interact with banks through a digital interface. There is a need to make these more “human”. This is being achieved with intuitive chatbots that have been made possible by huge advances in natural language processing and speech recognition tech. Eliminating human involvement in these interactions increase productivity and speed, allowing human resources to be directed to more productive activities. It’s also easier and more economical to thus provide 24/7 support, even for small operations.
Ultra-Personalization Using AI and Big Data
Modern marketing and customer service are all about personalization. It’s been proven that personalization is critical to establishing and maintaining customer loyalty. Using big data and AI, this kind of ultra-personalization is possible on a massive scale. Institutions can collect and analyse data about their customers, helping to predict customer needs and behaviours before they arise. These technologies are also finally opening up the possibility of true omni-channel experiences and assisting with risk management. Every customer can now enjoy personalized one-to-one marketing. This is huge and will change the game going forward.
Blockchain
Blockchain can simply be said to be a decentralized, distributed ledger (Distributed Ledger Technology or DLT) that records the origin and transactions of a digital asset in such a way that it is inviolable and unalterable. This high level of integrity is achieved through decentralization and cryptographic hashing; making it ideal for financial transactions at any scale.
Blockchain will revolutionize finance and other industries as it allows entities that don’t trust each other to transact and share valuable data in a secure and tamper-proof way. This will further democratize financial services and bring down monopolies, all while increasing transparency and enhancing security.
While there are many on-gong trends in the space, we feel that these 5 trends will be the most significant through 2020 and some even beyond that.
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