Let’s Understand: The Recent Trends of FINTECH

What is Fintech?

Fintech, often known as financial technology, offers substitutes for banking and non-banking financial services. Fintech refers to any organisation that employs IoT devices (Internet of Things), such as mobile devices, the internet, cloud services, or software technologies, to provide financial help. FinTech is enabling users to take control of their financial lives, resulting in higher levels of financial knowledge than before. At a compound annual growth rate of 23.84 percent, the worldwide fintech market is expected to reach $124.3 billion USD by the end of 2025.

The FinTech businesses that flourish will be those that successfully innovate to offer fresh approaches to persistent issues as customers get even more savvy and connected.

Keywords: Fintech, Artificial Intelligence, Machine Learning, IoT, RegTech, Blockchain, Cloud Computing, Banking, Neobanking

1.?Open Banking/Open API: Third-party financial service providers can access financial data using Open Banking API (application programme interface). To enhance consumer banking, banks and other financial organisations employ them. In addition, it combines the strength of consumer data and fintech advances to provide new revenue streams with more contextual services.

2.?Digital/Neo Banks: Neobanks are digital banks with no physical locations. Neobanking is fully online rather than having a physical presence at a specific location. Neobanking refers to a broad spectrum of financial service providers who primarily target tech-savvy clientele.

3.?The Internet of Things: Organizations across a range of industries are increasingly utilising IoT to run more smoothly, better understand their consumers to provide better customer service, boost decision-making, and raise the value of the company. IoT can also employ machine learning and artificial intelligence (AI) to help make data collection processes simpler and more dynamic. IoT gives businesses the ability to automate procedures and cut labour costs. Additionally, it reduces waste and enhances service delivery, which lowers the cost of manufacturing and delivering items and increases consumer transaction transparency.

4.?RegTech: RegTech is a platform that assists businesses in complying with complex industry laws. Special software automates tedious operations, maintains data security, and alerts bank personnel and users to fraudulent activity. RegTech is an abbreviation for regulatory technology. It is expected to alter the regulatory environment by providing technical advances to the highly regulated financial industry. Regulatory supervision is critical in this sector of the economy, which is why corporations invest much in it to avoid paying even more if or when a violation occurs. RegTech essentially allows businesses to use advanced software to facilitate compliance with existing rules and regulations. Identity management, regulatory reporting, transaction monitoring, risk management, and compliance software are the five categories of regtech solutions.

5.?Biometric Authentication: Biometric authentication is thought to be more secure than standard passwords and pins. Fintech is becoming a key industry for biometric authentication technology, with 93 percent of customers citing financial account security as the most essential issue.

6.?Artificial Intelligence & Machine Learning: Machine learning applications enable the processing of enormous volumes of data sets and generating important conclusions, which can drive effectiveness and create efficiencies, including time savings potential, by applying its algorithms. It analyses patterns in real time, allowing for speedy decisions. AI/ML is already being used in a variety of financial services applications, including fraud detection, lending approvals, and AML screening, as well as risk management and investment forecasting. Machine Learning is always improving, and Fintech will remain one of the primary businesses to profit from AI/ML’s capability. Many operations in banks, credit unions, and insurance businesses are improved by smart algorithms. Artificial intelligence investigates typical user behaviour in a banking application. AI is used to develop intelligent virtual assistants. The system analyses user habits and provides individualised financial advice on better terms for the client.

7.Blockchain: Banks are more actively utilising blockchain technology in the financial sector than insurance and credit institutions. Blockchain develops protocols within the bank and aids in the automatic recording of data: how the money arrived, where it originated, how it was used, and what it was spent on. Because every transaction is recorded and cannot be reversed, it protects banks against scammers. This means that a hacker attempting to commit a financial crime can be easily identified. Because all nodes in the network check financial transactions, it protects users from errors. Blockchain enables speedier international payments and transfers with cheap commissions.

8.?Cloud Computing: With the cloud, data centralization, merging, and augmentation become seamless. Cloud technology assists Fintech firms in securely managing their data through logical access control, which allows the authenticated user to access data whenever and wherever it is required.

9.?Virtual Cards: Virtual cards are becoming a guarantee for secure online payments for goods and services. The user pays for items without revealing the details of a physical bank card, but rather a 16-digit number of a temporary digital analogue. These cards are saved in a phone's digital wallet. They are used in both physical and online stores to make contactless payments. The card can be blocked without affecting the primary physical bank card. Virtual cards provide significant benefits to financial institutions, including cost savings by minimising physical card issuance; increased productivity because of reduced payment processing time and simplifying other procedures; and protection of personal information from criminals.

10.????Robotic Process Automation (RPA): RPA is a huge boost to this industry! Banks and other financial institutions may build up 24 x 7 chatbots to communicate with consumers, who can take comfort in the idea that someone is there to answer questions or address problems at any time of day or night. Everything is automated, such as invoice generation and balance sheet maintenance.

Conclusion: The development of the financial services business is accelerating. The FinTech trends listed above arose in response to client demand. They assist providers in providing better services that allow for greater access to financial information, higher transparency, faster transaction processing, more secure identity authentication, and better client lifecycle support.

The FinTech revolution is gaining traction. To avoid being left behind, listen to your customers, build their trust by providing transparent and frictionless experiences, respect them and their privacy, keep an eye out for industry trends, and always choose to make tech investments that fit with what people want.?