A finTech is a short form of the term Financial Technology. It is not a big brand or a computer software but is the regulation of Finance with the present-day technology and its trends to create affordable and creative ideas for the customers and various businesses in the financial sector.
It works on making the financial industry and all the terms related to it smart and tech-friendly. Including an introduction to online banking, blockchain, cryptocurrency, artificial intelligence, and many more. Fintech has emerged in various forms like applications, websites and it is rapidly increasing with every following day. FinTech is continuously coming with creative and innovative ways to make finance easy to access and deal with.
With every passing day, the FinTech industry is gaining attraction and response, and it is continually working to make changes in the banking and the payments industry.
Every year there are several trends, but the 6 major trends that will make an impact in 2021 are discussed below-
- Virtual and e-Banking
Virtual and e-banking are increasing with every passing day. It has elevated every day in the times of covid as well. The different services provided by these banks are online payments transfer, peer-to-peer transfers, contactless transfers by Master-cards, etc. They also provide the ability to acquire cryptocurrency without moving from your home. When an individual is in contact with these banks, visiting banks every time is no longer required. They provide their customers with comfort and pliability.
These banks have gained so much popularity in less period and are expected to experience an outpouring response in the coming year. According to a survey, it was calculated that 70% of the young generation is making a step towards using digital-banks.
- Digital Ledger or BlockChain
Digital ledger or BlockChain is the technology that stores all the transaction information of the user. The transactions of an individual are traced with maximum efficacy. It gathers complete knowledge of the users and compiles it into blocks.
Blockchain has changed the ways fintech functions by making it safer and secure. Almost every financial company and even many banks are accepting this new trend. It enables them to get more customers because of the transparency that they can exhibit with them. It works on the centralized procedure that means when data enters the database, it gets recorded there, it is difficult to delete it and it is highly protected and safe. Blockchain ensures that the data is end-to-end encrypted.
It is because of Blockchain technology that cryptocurrency exists and functions systematically. It is the way of exchanging money between foreign countries. It encrypts the user data at the time of exchanges.
- Open Banking & RegTech
It is a trend that enables the sharing of financial details in electronic format by using third party providers. With this, you can save and abstract money easily. It connects various financial bodies by providing data networking to them.
The APIs and various interfaces enable the third party to acquire financial information in the safest ways. Despite the effects of the global pandemic, the graph of this technology is increasing.
Regulatory technology referred to as RegTech manages regulatory concerns in the financial sector using technology. The use of technologies like ML and BigData provides data on various fraudulent activities like money laundering, cyber-attacks, etc. using RegTech.
- E-commerce & Contact less Payments
E-commerce and contactless payments have reached new levels in the covid pandemic. People preferred buying things online and completing payments via online mode to avoid physical contact. And whatever is happening in the world right now will leave a long-lasting influence, and these things will continue in the same manner in the years to come.
Online websites, especially e-commerce receive high traffic and these websites have different payment options available that attract the audience more as they receive full convenience. Online shopping is becoming the new normal as wearing masks has become.
- Equal Financial participation
Around 65% of the young generation today has a bank account or online payments application, but there is still a large number that accesses neither of them despite having smart mobile phones. Fintech is working to provide equal access to every stream in the field of finance. In various developing countries like India, fintech is planning to concentrate on the lower sectors to indulge them and encourage them to use online banking. It is planning to target weak and illiterate sections of society so that every individual could receive equal financial independence and knowledge.
- Artificial Intelligence and Robotic Process Automation
Fintech has been utilizing AI for a long time, but in 2021 it will be used widely. Artificial intelligence is expected to be way more ahead, be it the functioning of chatbots to solve queries to fraud detection techniques. AI will improve the overall experience of customers in the financial fields. And also, guide the interested ones to stay on the top for a long time.
Robotic Process Automation is not a financial technology, but it is a trend that will improve the working of various financial processes. The financial industry is using various RPAs to properly manage things that humans do, like customer service, customer onboardings, maintenance. RPAs help by completing these tasks fast and in a proper way.
With more and more financial trends coming into the picture, our lives and financial stability is going to be much easier in the days to follow. We have talked about various trends that have been making the financial industry easy to access and understand by maintaining proper security and transparency. The finTech revolution has become more and more important every day. If you are connected with the financial industry in any way, don’t miss out on these finTech trends.