The landscape of financial services is constantly shaped by the use and evolution of financial technology that adjusts to changing paradigms of user interaction. In light of the coronavirus pandemic, the future of fintech is progressing further along the lines of digital accessibility and remote use.
But what advancements in fintech allow this shift to occur? And how can financial services adapt to the tech-heavy, digital-only future of much of the industry?
As we look into the future of financial services and the advancement of fintech, we see progress and change on the horizon that requires innovation and adaption. By keeping up on these emergent trends, you can ensure you are utilizing the fintech tools of the new decade.
Advancements in Fintech
Many technological innovations of recent years are now shaping the trends of fintech across 2020 and beyond. Without the prevalence in tech like AI and blockchain systems that have flourished in the recent past, fintech might be on a different path.
However, these tools are enabling financial services to make the proper adjustments for a pandemic-stricken world. Since no industry is truly exempt from the impact of the coronavirus, updated business practices made possible by improved fintech are both essential and rapidly altering the workings of financial services for these unprecedented times.
Here’s what and how fintech is advancing for the new decade:
- AI Analytics — Fueled by the big data generated with every interaction in our digital world, Al analytics and machine learning processes are enabling fintech to look into customer data like never before. This advancement in financial services will see more personalization come to fintech—both in marketing and in user accessibility—with platforms increasingly adapted to customer specifications for mobile use.
- Blockchain — Through its ability to offer security in a decentralized and user-friendly platform, blockchain technology is the future of fintech. Data breaches in the financial services industry cost an average of $12.1 million. With blockchain’s cryptographic hash functions and tamper-proof nature, fraud and attack can be significantly reduced, making for a safer future of digital, instantaneous transactions.
- Cybersecurity — 69% of financial services CEOs surveyed by PWC said they were “somewhat or extremely concerned about cyber-threats.” The future of cybersecurity will do everything in its power to mitigate these threats. With the power of blockchains and machine learning processes to catch and prevent attacks as they occur, fintech systems are already beginning to become safer and smarter. Add to that safety the increased localization and power of robotics and automation, and the future of cybersecurity in financial services is looking better than ever.
- Open APIs — An application programming interface (API) enables transactions within a database, gathering information and reporting it back to a user. Advancing in the world of fintech, open APIs are being used by large banks and smaller payment services alike to host transactions and provide a superior user experience. In many ways, APIs are transforming payments technology, and their use will see broad integration in the new decade.
- Robotics Process Automation — An advancement of AI and chatbots, Robotics Process Automation (RPA) are digital assistants that can help with a host of financial services processes, enabling smarter agents. These tools can help with data analytics, risk analysis, and even HR processes like onboarding and background checks. For the financial services industry, this enables more time to be focused on customers and smooth payment services in a world of ever-increasing mobile transactions.
With advancements like these, financial services need to adapt for future success. That means integrating these trends in secure systems that accommodate at-home users.
How Financial Services Should Adapt
The future of fintech is digital. All the time, advancements like those in fintech are trending towards digital-only banks and currencies that exist only in a virtual space.
Starting off the decade with a global pandemic has only increased the trend towards omnichannel digital services, meaning the financial service sector must learn how to accommodate high traffic across various platforms. Adapting means reaching users where they are at, onboarding the digital generation through remote methods, and catering to users with seamless payment processes.
For example, the Kofax Digital Banking Report found that 43% of users indicated that a poor account opening experience would likely result in their switching banks. This shows the importance of a positive financial service experience, one that will suit the needs of customers in the era of coronavirus and artificial intelligence. In the new decade, that means a mobile experience. Seamless user-friendly processes can make all the difference in the changing fintech landscape.
Fintech is advancing all the time to keep up with the needs of these times. Financial services must adapt as well, building sufficient online user experiences that work with the security enabled by advancements like blockchain and AI. By adapting to this future, financial services can retain can build value with every new advancement in fintech.