Financial Technology (FinTech) represents a combination of financial services with Information Technology (IT) that is disruptive to the incumbent financial system as it transforms financial services including enhancements to existing areas as well as entirely alternative solutions. For example, the legacy financial system is under serious threat from emerging technologies like Blockchain technology to eliminate the need for an intermediary trust agent for payments clearing and settlements.
This trend will continue as fintech companies continue to make use of new tools and techniques. The following are some of the more significant fintech trends that are likely to develop in the near future.
Mobile Payment Apps
Mobile payment is a process of paying for goods or services or transfer of money through mobile/smartphones. The mobile payment industry has evolved significantly over the years with big brands entering the market and developing advanced technologies that provide ease of payment using mobile/smartphones.
Demand for cost effective and convenient payment modes has remarkably contributed to the development of new and innovative mobile transaction technologies. Similarly, widespread adoption of mobile phones in countries such as India and China has encouraged service providers to provide cashless payment options. To leverage the growing opportunities of the developing markets, many market participants have plans to come up with own mobile wallet in future, which would significantly contribute to the business growth.
PayPal, Venmo, Square Cash and others allow consumers to link their credit cards or bank accounts and make quick P2P transfers.
Artificial Intelligence & Chatbots
Artificial Intelligence (AI) has reached the stage where it is sufficiently advanced and affordable to warrant practical implementation in financial services. Banks are busy exploring ways in which they can harness the power of AI to streamline internal processes and improve the customer experience. This report will explore what AI applications are relevant in banking at this time, examine where AI is already making an impact, and offer recommendations on how banks should proceed.
Several aspects of banking are ripe for AI-driven intervention. Many of their data-driven back-office processes are high volume and repetitive in nature, and hence are ideal candidates for intelligent automation. At the front end, with the majority of customer interactions occurring through digital channels, there is also considerable scope for AI to improve the quality of and add value to the user experience.
In the future, you can expect all banking brands to offer their own chatbot. Customer-facing uses of AI include chatbots that improve communication between banks and their customers, advanced analytics that can offer proactive advice to consumers and take simple financial decisions on their behalf, and facial recognition that improves onboarding and makes it easier for consumers to log into their accounts.
The global blockchain market is projected to witness a significant CAGR of 71.46 % during the forecast period to reach a total market size of US$4.401 billion by 2022.
Mainstream banking consumers aren’t exactly chomping at the bit to use forms of payment like bitcoin right now, but little by little it appears to be gaining traction as more and more people dip their toes in the bitcoin waters.
The adoption of DLT (distributed ledger technology) among the various application such as payments, smart contracts, exchanges, digital identities, and documentation has also supplemented its growth. It is expected that the use of blockchain technology is going to increase owing to investments in blockchain technology start-ups, ties between financial organization and blockchain technology providers.
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