Unfortunately, 2020 has been a year of unprecedented disruptions. People dealt with financial constraints while companies had to struggle to make ends meet. As we welcome 2021, it is time to end all the hardships and make this year known for remarkable adaptation and transformation. Organizations should therefore build a strong financial standing to navigate through a volatile economic landscape, which would become possible through FinTech.
Financial technology can help your company mitigate risks while cutting costs and reducing services. Similarly, it can automate financial operations, offer more versatile choices to customers, and access new payment modes. From the financial services companies use to the ones they provide, cutting-edge FinTech trends can change the way professionals do business.
Soon, you would see financial software giving customers personalized products with the help of analytics. Likewise, chatbots are becoming mainstream, and digital-only banks are making waves, fueling innovation in the FinTech industry. So, don’t you think it is time to adapt to these innovations? Undoubtedly, integrating technology can be quite challenging but not when you are well-versed in FinTech trends. An online course on FinTech can help you gain an understanding of technologies shaping the future of finance.
You will also learn how to assess upcoming trends and think strategically to implement FinTech solutions. After all, this is only the beginning of the revolution in the FinTech industry. Here we are sharing insights into FinTech trends every business professional should watch out for in 2021.
Nowadays, people are benefiting from online and mobile banking services. Since real-time interactions in banks are decreasing, we would witness a sharp rise in digital-only banks. These banks provide various virtual banking amenities such as contactless Mastercard, P2P transfers, and international remittance. Do you know what the best part is? These virtual transactions are free of cost, saving you from the extra expense.
Similarly, customers can buy different cryptocurrencies – Bitcoin, Ethereum, etc. through digital banks and make payments online. Digital-only banks have become increasingly popular in a short period of time because of the utmost convenience it offers to customers. People no longer have to go through tedious paperwork when opening an account or acquiring a loan. Neither do they have to stand in long queues behind the cash counter to deposit cheques. In digital-only banks, you can pay and receive money online.
Virtual Payment & Cards
With the increasing volume of credit card fraud and high-profile data breaches, customers often don’t like sharing their banking details with unknown sites. Surprisingly, FinTech is bringing new payment trends that limit exposure. It offers digital wallets such as Apple Pay, PayPal, Venmo, etc., to make payments readily. Likewise, customers can apply for a virtual card from digital banks to transfer and receive funds across different channels.
These cards also offer additional value to the user in the form of cashback opportunities and interest-free credit, captivating more people. According to Juniper Research, the use of virtual cards is likely to grow by 90% in the next few years. Speaking from a business perspective, virtual cards offer a real revenue opportunity in the B2B models. Here’s why:
- All the spending and receiving information is immediately visible in virtual cards, helping companies manage expenses better.
- In case of theft, the user won’t suffer from any monetary loss. The number on the virtual card expires as soon as it is used for payments. Thus, eliminating the likelihood of fraud.
- Unlike cheques, virtual card payments go through accounts instantly.
Emergence of WealthTech
The increasing market volatility and falling interest rates are breaking investment spirits worldwide. Some investors are unwilling to take risks, while others have taken out money from the stock market. Luckily, WealthTech brings together technology and wealth to deliver smart financial management solutions. It incorporates artificial intelligence and machine learning to create Robo-advisors.
These bots have built-in algorithms and share human-like intelligence, helping investors make smart financial decisions. The automated bots also provide recommendations on lucrative financial instruments based on the available market data. Simultaneously, Robo-advisors consider investor’s risk appetite and personal goals, offering appropriate investment options.
Moreover, WealthTech is bringing exciting solutions such as digital brokerage platforms. It gives information about all the micro-investment platforms and stock markets with changing share prices and purchase options. Hence, people can invest money without paying additional commissions to real-time brokers. FinTech’s goal is to create profitable financial solutions. WealthTech makes money management more convenient for people while opening doors to new investment opportunities.
From testing Robo-advisors to using algorithms for assessing credit history – artificial intelligence has come a long way in the FinTech industry. Companies are expanding their use of intelligent technologies to machine learning and robotic process automation to streamline finances and make better decisions. You can use machine learning to prepare credit-risk models and in addition to conducting background checks, it evaluates the client’s past behaviors and credit history before giving out loans. Hence, reducing the risk of defaults.
Besides this, the predictive and proactive models can help organizations anticipate risk. It keeps an eye on market trends and alerts companies in case of changes in the interest rate or money supply. Likewise, it can assess customer’s transactional patterns and unfold fraudulent activities in no time. Intelligent technologies managing financial services can save companies from financial losses while reducing the costs associated with workflows.
Although the transition towards blockchain and cryptocurrencies has been slow, it is one of the most critical FinTech industry trends. According to Statistica, the blockchain market is likely to climb over $39 billion in 2025. After all, this technology offers many possible advantages to businesses across different industries. It provides a decentralized ledger where companies can make payments without any involvement from the third party, eliminating all transactional costs.
As a result, financial institutes can use blockchain to expedite asset and cash transfers. Besides this, blockchain innovations can help companies develop smart contracts across the globe. Usually, these are self-executing programmable contracts, improving the quality of financial services like loans and insurance. It automates processes which means, it can assess whether a person is eligible for a loan or not. Above all, the entire process is transparent and traceable, ensuring a secure network.
Undoubtedly, the future seems bright for the entire FinTech industry. After all, there is soaring demand for virtual financial services in the market. But now, everything depends on business professionals and how they will adapt to these changes. You can return to school to keep pace with innovations or seek some brilliant eLearning opportunities. Having a keen understanding of the FinTech industry and implementing similar practices is ideal for making your company thrive.