Have you heard about the term FinTech and Fintech trends that have revolutionized various industries globally? It is neither a brand name nor software; it is a cumulative term used for tech trends in the financial sector. With the growing financial demand, the Fintech industry is developing exponentially. The expanding role of Fintech has led to a new digital payments age, reshaping how people do transactions.
The global Fintech market has reached a value of worth US$111,240.5 million in 2019. And according to the experts, it will reach nearly US$158,014.3 million by 2023 that clearly shows how fast this Fintech industry is going. These solutions are leading the financial sector to global success. As a result, many companies plan to join hands with fintech software development companies in the future.
In this blog, we’ve discussed the top FinTech trends in 2021 and beyond.
1. Blockchain Technology
The evolution of Blockchain technology has completely transformed the functioning of several industries. It is now predicted that it brings tremendous changes in the global financial systems that have remodeled their working patterns. According to various studies, 48% of banking officials find Blockchain a powerful technology that significantly impacts the banking and financial sectors in the coming years.
However, Blockchain is designed for cryptocurrencies, but now it can also be used for fiat currency transactions. Today, banks, retailers, and several other online financial systems use Blockchain to keep their user information highly confidential in a new and innovative format.
2. AI and Machine Learning
Today, AI and ML have become a part of our daily routine; these technologies have almost absorbed and adapted our day-to-day activities and list our day accordingly. As a result, Fintech is also applying it to know about their customer behavior and demand. Today, banking organizations automate AI in their working systems to remove the redundancies and promote more accuracy.
According to the experts, AI is predicted to decrease bank operating costs by 22% around 2030. That could mean savings to the number of US$1 trillion ahead. Many banking and other financial institutions already started relying on AI in great numbers to handle large transactions.
3. Digital-Only Banking
Digital only bank has emerged as one of the most prominent fintech trends in 2021. Why not, when a bank virtually allows P2P transfers, contactless MasterCard besides free transaction fees, global payments, fast bill payment, reset pins from home, and a chance to buy and exchange Bitcoin, Etherum, and other cryptocurrencies, the financial industry promptly notices.
It becomes popular as it lets users do banking from anywhere, anytime. Following this concept, people do not need to visit banking organizations, no need for lengthy paperwork physically, and most importantly, it provides a big relief from the long queues. Digital banking gives a certain amount of independence to the users regarding their financial transactions.
4. Biometric Security Systems
Today, to unlock our smart devices, we all use fingerprints. It is a little example of what biometric data security is. It is one of the safest methods rather than codes and passwords. It is complicated to crack when combined with additional metrics. The use of biometric security systems in the Fintech industry makes transactions highly safe and secure; it also helps customers and financial institutions save their time. Apart from mobile devices, financial institutions are also adopting this trend to protect their user’s data from hackers.
5. Open Banking
Open Banking is another popular trend that brings banking and financial sectors to a whole new level. It allows data networking among financial institutions. It is associated with PSD2, which keeps the bank’s data standardized, secure, and easily shareable to reliable companies digitally. It allows third-party apps to control banking and client-side financial information via using APIs and AI. In 2018, open banking had reached $7.29 billion in 2018 and was predicted to reach $43.15 billion by 2026.
6. Payment Innovations
In Fintech, Payment innovations come with multiple elements, including contactless payments, mobile payments, mobile wallets, smart speaker systems, identity verification technologies, AI, and machine learning for security. In 2019, the global mobile payments market size reached US$ 1,146 Billion. The first digital native is Gen Zers that will be the most competitive driver of payment innovations.
7. Robotic Process Automation
RPA is another prominent Fintech trend 2021 that remains in the trending lists beyond. This automated bot is considered one of the most helpful tools in the Fintech industry. It helps organize customer’s records, perform complex calculations quickly, and respond to users swiftly. According to market experts, RPA will continue to benefit the Fintech market globally in 2021 as well. It improves customer onboarding, risk assessment, verification, data analysis, security, and much more.
The financial industry is a regulated sector, and RegTech is a seamless way for banks to meet the stringent requirements by regulators globally. With this method, There is no need to overhaul the existing models; it will help financial institutions co-create and scale solutions rapidly in partnership with FinTech. The most valuable part RegTech offers to financial institutions is the ease of complying with necessary regulations.
9. Autonomous Finance
Autonomous Finance is another prominent Fintech Trends 2021 that remodels money flow. It is a concept of self-driving funds that introduces a new way of interaction with money. Robo-advisors provide software-based financial advice, strategies and handle mutual-funds investments in autonomous finance. With the help of ML and AI, Autonomous Finance successfully manages the user’s funds.
10. Use of Disruptive Technologies
The use of disruptive technologies like AI, ML, Big Data, and Voice-based technology in the FinTech industry is the most successful approach. These technologies successfully solve customer queries, security, faster payments, etc. All in all, disruptive technologies will surely help the fintech market progress, but to a certain extent.
Here are the top 10 fintech trends in 2021 that are expected to take the FinTech industry to a whole new level. The financial services industry is growing, and undeniably, it will continue to grow beyond as well. The FinTech trends mentioned above plays a vital role in delivering more excellent financial services. Hence, if you don’t want to remain behind, make tech investments aligning with your user’s demand.