What would lead Fintech this year?

There isn’t much left to be said about Fintech that has not been said yet. Had it been ten years ago, the scenario would have been different. Any Fintech solution for our finance-related issues would be considered as cutting-edge innovation. But, now it is not so. Fintech is growing and expanding in leaps and bounds since the last decade. 

Matt Harris, a partner at Bain Capital Ventures, puts it impeccably. First, there was the internet, then the cloud, then mobile. Now, Fintech is going to be the next major platform, as financial functionality becomes a native component of the tech and business stack.

After the internet, cloud, and mobile, Fintech has emerged as the fourth layer in the technology stack. So, what has led to such an enormous increase? And what will be determining its growth further? Let’s have a look.

 There is a clear need for a RedTech solution on the market. This gap will be filled quickly, and we'll likely see notable startups by the first half of 2021. Maintaining a centralized database to keep track of new restrictions is a convenient way to adapt a financial institution to legal requirements. Banks are governed by the Monetary Authority of Singapore (MAS) and the Financial Conduct Authority (FAC). Similar practices are likely to develop all over the world in 2021.

 Internal and external financial systems become faster as a result of the Internet of Things (IoT) client management and communication. Retail banking is the division that has seen the most growth in Fintech IoT so far. CitiBank's beacon-based solution for opening ATM entrances with smartphones during off-hours is a perfect example of such creativity. Machine Learning (ML), one of the key AI components, is widely used in banking in the areas like risk management, fraud development prediction, and prevention, etc. So, Fintechs can explore Artificial Intelligence's unexplored potential in 2021.

 In 2021, a Fintech that uses Robotic Process Automation (RPA) in their business management solutions may take a lead as it reduces the amount of human capital used. A graphical user interface is used to complete the desired task by robotics. Simple tasks such as gathering statistics, summarising large documents, and sending emails to more complicated processes, such as database organization are all part of the job.

Changes are unavoidable due to the advancement of technology and the ever-changing demands of financial markets. Each year transforms Fintech in a new way. Companies' performance is determined by how such patterns are integrated into their operations. Our adaptability to these changing environments and our ability to catch-up with the innovations is what will matter in the long run.