Articles | September 3, 2020
Top FinTech Trends for 2020
In a world of fast developing industries, the global marketplace, and the financial institutions have to be adaptive to trends and offer more innovative and inclusive financial solutions that attract new clients and retain old ones. Staying ahead of the competition means implementing solutions that are user experience friendly, such as FinTech applications. Read this article and find out how your company can benefit from implementing broad-spectrum FinTech solutions.
FinTech refers to the automation of tasks that would otherwise require the customer to visit an actual financial merchant or financial institution to accomplish. Thus, instead of having to withdraw money from the ATM to pay for a service such as groceries, you can easily make a payment from a mobile wallet or some app and have that done in no time. This comes with security integrations, which can then be assigned to authorization credentials and managed locally on a trusted device and from a secured server. For example, Transferwise is a UK FinTech service that offers cross-border and inter-bank transfers across all global currencies and with over 750 currency routes, with reduced forex rates compared to banks. The service also provides a ‘borderless’ account option for freelancers and businesses with 27 currency variants.
In financial and insurance industries where your competition is investing mega-budgets in software development to automate processes and create effective and leaner procedures, you have to keep up too. FinTech, with its many elements, offers your company the best chance of achieving that optimum.
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What are the Benefits of FinTech
FinTech is a big win for both financial institutions and their clients. For the former, it offers a path to complete customer self-service and reduction or elimination of potential log errors in the back office. The security risk and the potential for fraud and human error are almost reduced if the customer can initiate native transactions on their remote devices coupled with powerful authentication protocols. For insurance, clients can print out an application form, scan it and generate a unique QR code that will then be scanned back by the provider. Or they can fill out an online application using an app on their device, even allowing them to fill out forms offline and upload them later as attachments when they are done.
But FinTech isn’t just about replacing the physical way of doing things, for example, meeting in a bank to withdraw from a group account. Think about productivity gained by freeing up your staff from all the extra paperwork, and savings on monthly budgets by not having to do physical filing. You could reroute that part of the budget into a better purpose such as the development of a mobile application.
The ROI from FinTech also includes operational fees. For example, transaction fees for which customers would rather pay extra in exchange for the convenience of not having to go to a bank physically. With a great FinTech experience, there will be increased brand awareness and loyalty, both of which have ripple effects on your company revenue.
Artificial Intelligence, Blockchain and IoT as FinTech innovations
AI is one of the main technological trends for 2020. It goes beyond merely automating tasks. With the deployment of AI, there is potential for massive savings and improved customer experience. Banks with vast numbers of clients could, for instance, employ secure chatbots that can answer customer queries 24/7 through voice or text. Such an intelligent system can also monitor a customer’s transactional behavior, notifying the bank or customer about possible fraudulent transactions. It could also create automatic statements and disburse them to the email of the account holder. For insurance companies, an actuarial AI model can be built for calculating risk or projecting payouts.
Blockchain as a ledger-based technology can help banks keep cleaner, more accurate records, right from the customer onboarding process at account opening stage, to assigning a unique key to each transaction which would make errors such as duplication and double debits/credits more easily detectable. Blockchain also provides the potential for a global network of banks or accounts which allow customers to access real-time financial services regardless of location.
The Internet of Things has been gaining in importance for several years now. IoT is one of the major 2020 trends in digital transformation and in 2020 during the pandemic, the contactless payments became a new standard. It is presumed that the situation will boost the adoption of cashless and IoT-based payments (e.g. using a smartphone or smartwatch) and IoT will continue to have a huge impact on the FinTech industry.
Get Your Company an IT Solutions Provider
You may now be wondering, “So, how do I actually implement this?” – By hiring a FinTech professional services company with expertise and experience in creating custom software solutions in this area. You don’t even need to hire your own IT team. You can outsource or use a nearshore development company, choose the model of cooperation, and work hand in hand with certified programmers. For example, the hired team can develop a financial application or API, implement it and maintain it for you. That way, your FinTech software or product will be regularly updated, secure, working properly, and all the detected bugs will be fixed immediately.