5 Trends Shaping the Future of Fintech

Over the past decade, fintech has been a revolutionary force in the financial services industry. It has transformed the way we bank and handle our money. What’s more, is that the sector is ever-changing and always on the precipice of some kind of innovation. Below are the top five trends that are shaping the future of the fintech space domestically and internationally.?

Digital-only banks?

While this might seem like a bit of a utopian idea since banks have been around for hundreds of years, digital-only banks do offer a viable alternative. With banks constantly looking to cut costs and the pandemic having proven that people can access their money and conduct transactions without having to go to a brick and mortar bank, digital-only banks will continue to see an uptick in presence.?

Cashless Transactions to be the norm

There are at least ten countries across the world right now that are just a few years away from going completely cashless. Sweden, China, the Netherlands and South Korea are among the few. This isn’t surprising considering just how fast cashless transactions have grown. Cashless transactions are hassle-free and more convenient for both vendors and consumers.? In fact, as per ACI Worldwide’s report, more than 70.3 billion real-time payments transactions were processed globally in 2020, i.e. up 41% over the previous year. This reflects the power of cashless transactions and how they are poised to dominate in the years to come.?

Blockchain

In this year’s budget, FM Nirmala Sitharaman’s most significant announcement was about the proposal to introduce the Central Bank’s own digital currency that will be issued via digital rupees that use blockchain technology. Thus, in a short span of time, blockchain technology has already risen to become a technology of choice for governments. Financial institutions are using blockchain to promote payments, investments and asset and money transfers, while consumers are slowly favouring its use due to the speed and security that blockchain technology provides.?

Insurance

Although the insurance sector has been a late adopter of digital technology, fintech companies are aggressively expanding their footprint in this space. From automating operations to establishing more digital channels of communication, fintechs are working on creating more trust and consumer engagement via digital tools. Whether it is risk-free underwriting or on-the-spot online purchases of policies or activation and claims processing, tech-driven startups continue to redefine the insurance ecosystem.?

Lending and Payment

Conventional lending has seen an immense change due to the advent of fintech companies. From approval processes having gone completely online and therefore much faster and more seamless to the ability of lenders to assess potential borrowers using alternative data sources such as social media activity, ?traditional lending has been challenged on several fronts. Overall, fintech-led lending has led to borrowers having faster access to their credit and it has been a transformational force in the financial services space. Similarly, fintech has also influenced the payments landscape, introducing new and innovative models such as Buy Now, Pay Later (BNPL) solutions that have increased in popularity. These new solutions have established a new type of real-time, point-of-sale (POS) finance system that has led traditional banks and other payment providers to think outside the box and adapt more quickly to compete.

These are just a few of the trends that are accelerating the pace of change in fintech. Overall, the fintech industry will continue to be a force of positive disruption in the financial services space and the future holds exciting technologically-driven changes.?