Financial technology or fintech has been one of the popular discussions in recent years. Fintech combines technology and financial services in everyday use products. According to a survey the financial services industry had a revenue of almost $4.8 trillion in 2020 while it is forecasted to grow to $6.7 trillion by the end of 2023. From making intelligent predictions in the online shopping market to providing on-the-go payment solutions to consumers, FinTech is bringing convenience and efficiency not only for businesses but also for their customers.
Evolution of Fintech in 2021
FinTech utilizes a number of technologies to deliver seamless services to the financial industry. It uses state-of-the-art systems to manage customer information, process and analyse it, use it to make future predictions and to assess market trends. Companies can plan better product strategies using these intelligent solutions. Listed below are some technologies that fintech services incorporate.
Banking on Big Data Tools
When we talk about the Fintech industry, it is important to understand that customer data is vital for their existence. Managing this sheer amount of data often becomes a challenge for these companies if they are not making use of intelligent technologies. Data analytic tools have become a need of the hour to process information and identify important pointers from raw data. These specific patterns are detected using big data analytics which are then used to predict future growth of a company and the amount of customer engagement that can significantly boost a businesses prospects.
Artificial Intelligence to the Rescue
Intelligent systems play a crucial role in the development of financial technologies such as automated wealth management, AI chatbots, credit scoring systems, etc. These solutions powered by artificial intelligence (AI) and its subsequent areas of interest such as machine learning (ML), computer vision (CV), natural language processing (NLP) incorporate advanced features that can meet the modern needs of business entities.
AI-driven fintech solutions help enterprises to enable streamlined operations keeping intact globally acclaimed standards, preventing digital fraud and offering remote onboarding opportunities for customers anywhere and anytime in real-time. Advanced AI-based OCR technology engines can now extract user details from identity documents in a jiffy that paves way for quick, efficient, and convenient identity verification while new account openings.
Digitizing Business Services
Today, fintech companies incorporate Robotic Process Automation (RPA) to maximize their chances of business service delivery. Automating manually done tasks can save a lot of time and effort for businesses and their personnel. Apart from that, managing finances and less important tasks become comparatively easier when handled by self-learnt software. This way operational staff can focus more on how to build better revenue for the company rather than getting strangled with complex and tedious tasks.
A fine example of this is automated Know Your Customer (KYC) solutions that allow businesses to perform effortless identity verification of their potential clients, customers, and partner entities. Digital KYC software comes with document and face verification utilities through which customers can authenticate themselves through a single face scan or by submitting a photo of their original government-issued ID document.
Blockchain Technology as a Trendsetter
In order to scale customer experience and day-to-day operations, the financial services industry incorporates blockchain technology. Businesses can now acquire user data through a secure and safe channel, store the data on the cloud and enable quick customer transactions through safer protocols. Utilizing such technologies can curb the probability of cyberattacks since now transactional information is stored on a secure ledger that is encrypted using blockchain technology. Digital payments can now be done in an instance regardless of where a person is currently present or what time it is.
FinTech Trends and Applications
Financial Technology has use cases in various Industries such as P2P, cryptocurrency, banking, e-commerce, travel & tourism, etc. A couple of FinTech trends are listed below:
RegTech (Regulatory Technology)
Today, businesses operating in the digital space are faced with a lot of robust and stringent regulations. Ensuring that your company is compliant with anti-money laundering and KYC laws has become the need of the hour. These rules and regulations are a deterrent against identity theft fraud and financial crime and can help take down criminal activity carried out through business. With the world moving towards innovation, Regulatory Technology (RegTech) is becoming increasingly popular with each passing day. It allows businesses to stay compliant with state-of-the-art regulations and enable better Information sharing with financial regulators such as FinCEN, FINMA, FINTRAC, etc.
Innovative Payment Solutions
The research by Juniper shows that in five years more than half of the world’s population will have a digital wallet. Virtual payment solutions like Payoneer and PayPal are in high demand because of their ability to provide quick and remote transactions instantly. Financial service providers like these bank on technology trends to provide purposeful experience to the customers allowing them to create a better brand image and a firm position in the market.