Fintech has brought a variety of services under one umbrella with digital banking and other growing technologies. The emergence of cryptocurrency, mobile wallets, online payment apps among other advancements brought the inclination of fintech towards new technologies and to restructure its business models.
The services of banking systems went online with a growing number of smartphone users and several digital banking services started using open banking that allowed third parties to access financial data. This period also saw a boom in startups that were embracing innovations and attracting investors. All these advancements in technology and change in Fintech are termed FIntech 3.0. Now is the era of Fintech 3.5 which observes blockchain and open banking that are continuously changing fintech operations.
Technologies taking Fintech to New Height
When blockchain technology grew and acquired different sectors, financial service sectors also changed as it provides safe and stable transactions. According to the FinTech Blockchain Market report, the fintech blockchain market is expected to reach $ 6,228 million by 2023.
Advancements were seen with AI & ML as well, these technologies served to automate the financial service processes and prevented any online fraud quite effectively. The ability of AI to work rapidly even with large amounts of data made it an important part of integration in fintech software as well. Not limited to intelligent technologies, several new fintech trends have started disrupting various segments especially consumer-service-oriented segments.
Following Industries Embracing Disruptive Nature of Fintech
There are several units that comprise fintech like incumbents, companies facilitating financial services like MasterCard; accountancy and business advisory firms, etc. These categories collectively contribute to the expansion of fintech along with growing technological advancements like the use of mobile sites and apps.
Fintech is causing disruption in the following industries:
- Mobile Payments: Bank payments are done mostly through mobile with an increasing number of mobile users. So fintech companies are not behind in providing mobile services. Fintech industries developed compatible methods of payments that were both compatible with android and iOS.
- Insurance: Insurers are now more aware of measuring and tracking the usage of products.
- Investment & Savings: Fintech brought the number of investments and saving apps among customers. Acorns, a mobile-first and banking app, provides creative funding options, round-ups, and purchases connected with cards and simplified other processes.
Trends in Fintech Shaping Future of Financial Service Industry
Technological advancements like AI, Blockchain, Digital Banking, RPA, and others have embarked on the exploitation of financial services in better ways. Other trends that are disrupting fintech are:
- Software Defined Network (SDN): SDN is a network architecture approach that enables networks to be controlled intelligently and securely through open APIs. Some financial firms store data in the cloud while some use on-premise data storage, SDN makes both types of storage secure and responsive.
- Fintech-as-a-Service: Various Fintech companies have started offering their APIs to others in the financial market who allow their developers to build financial apps with security and tested functionality.
- Open Banking: This approach allows sharing of financial data electronically and securely under specific guidelines. Data sharing is done only with licensed partners through an open API where they work together for the development of apps and services.
But there is a difference between Banking-as-a-Service (BaaS) and Open Banking. To know click here.
New Fintech Trends Upsurge Innovations
Financial institutions need to evaluate the technologies and try to uplift their services. Enabling technology with services will let them compete globally and fulfill customer expectations. Fintech companies must formulate certain baselines to adopt new trends and must be adaptive to customers’ needs. To take innovation and adaptability parallelly, it’s significant to foster an innovative culture in companies and build strong teams.
Being Open Banking for open access of banking functionality, Fintech-as-a-Service providing shared API to broaden the accessibility of services or Blockchain for security, all are disrupting the Fintech and banking institutions. There are more fintech trends that are significant for financial service companies. Get insight on these trends in our blog.
