Author: Chi Vo The FinTech world is moving at incredible speeds with the major transformations of Fintech businesses. These changes are significant because they affect everything relating to payments, money, and banking.
With business in such a state of flux, there are predictions and trends for the future of Fintech in the coming years. In this post, we will forecast eight major technology trends that will drive fintech growth and alter the way finance operates.
Digital-only banks offer a variety of virtual service finance such as peer-to-peer transfers, international remittances, contactless MasterCard with no transaction fees, and the option to purchase cryptocurrencies such as Bitcoin, Ethereum, and others.
In a short amount of time, digital-only banks have achieved enormous appeal. It is crucial because it provides the most convenience to customers by removing laborious paperwork, long lines, and the need to physically visit a bank.
In 2022, there will be a significant increase in the number of digital-only banks. And this increase will result in a large decrease in the number of people visiting the bank physically. According to research, this decline will be 36% from 2017 to 2022, with the rise of digital-only banks being the primary driver.
Robotic process automation (RPA) is a process automation technology that uses software robots or digital workers to automate operations that are typically performed by people. RPA has previously been applied in the financial services industry to reduce costs and increase overall organizational efficiencies.
Not only that, but financial institutions have used RPA digital workers to automate a variety of back-end office tasks, including security checks, customer onboarding, account management, and closing, trial balance, credit card, and mortgage processing, and many more.
The major benefit of RPA is that digital workers can complete these activities faster and more effectively, allowing financial institution personnel to focus on other important areas such as customer service.
Blockchain technology has drastically changed the way the FinTech business operates. Transactions can be completed in a safe and secure manner with this cutting-edge technology. As a result, banks and financial institutions are quickly adopting Blockchain technology in order to reap its benefits.
According to a Business Insider Intelligence report, over 48% of banking professionals believe that Blockchain technology would have the greatest impact on banking in 2022 and beyond.
One important aspect of Blockchain is that it is not just cutting-edge technology, but also a new philosophy of decentralized finance that focuses on eliminating centralized procedures. Once data is registered in the Blockchain system, it becomes incredibly impossible to modify and thus remains secure.
Blockchain ensures that the information saved is secure from beginning to end with the least amount of risk. Blockchain technology is also utilized to enable safe cross-border payments.
Blockchain technology has also spurred the development of several peer-to-peer financial platforms that allow for decentralized monetary interactions.
Banks and financial institutions are already looking to boost their investments in Blockchain technology in order to save costs while also improving internal operations.
Banks all over the world are now attempting to incorporate artificial intelligence into their operations. According to a study, AI will cut 22% of a bank's operational expenses by 2030. In other words, banks can save up to $1 trillion by implementing AI.
Artificial intelligence can potentially be used to combat escalating cybercrime by detecting financial scams and threats. It can also be more customer-centric because AI and ML algorithms can record all interactions with extreme accuracy and precision.
AI has already demonstrated its use in customer management with cutting-edge client service solutions such as Chatbots. It's only a matter of time before banks and financial organizations use this technology for the same purpose.