5 FinTech Trends to Follow in 2019
Did you know that bank spending on new technologies were about to reach 17 billion U.S. dollars in North America in the year 2015 and increased to 19.9 billion in 2017?
The global venture capital investment in FinTech companies is increasing rapidly.
How?
The term FinTech is used to describe innovative start-ups that provide a modern technological solution to financial companies. The reason behind its huge success is totally dependent on its growth in individual markets such as savings, investments, and loans, which differ greatly.
Despite having a host of FinTech applications and industry subsections, FinTech remained out of the spotlight while bitcoin and cryptocurrency were dominating the headlines. The reason being FinTech was still in its initial growth phase. Nonetheless, in the next few years, FinTech applications and products will be developed in a more advanced way and going to gain popularity. Not only because their usage will help people in making cross border remittances, but will also increase the data points used in making automated regulatory functions and loan decisions.
The FinTech projects are at their boom and are expanding greatly over the past few years. Several FinTech subcategories have already been adopted by sectors like insurance and regulation. They have started using machine learning to automate claim-related and internal processes.
Let’s discuss in detail the latest trends of FinTech that are going to stay in 2019 and beyond.
1. Mobile Payments Growing on a Global Scale
Although it is predicted that the worldwide volume of mobile payments is going to grow by 60%, still there are countries and some areas with financial exclusion. Financial exclusion refers to the situation where financial services such as banking and payments are not available. Several brick and mortar banks have promised to deliver banking and financial services to such places using mobile banking as the primary source of financial management. It is one of the most convenient ways of connecting people with the current financial system. All they need is a smartphone and internet access to open a traditional bank account. FinTech app development companies, on the other hand, will require different mobile payment solutions to give the industry a layer of security. This will not only help to prevent fraud but also will improve the ability of people to become part of the financial system. Another deployment of 5G technology is soon going to be introduced to become ubiquitous. It reduces the latency and transaction time by handling the number of transactions at a scale.
2. AI and RPA
Solutions using AI and RPA have been introduced in the financial sector by FinTech companies such as anti-money laundering software infused with AI, regulatory reporting, transaction monitoring, and risk management. These companies will continue to grow, and eventually, we will observe the significant return of Investment from FinTech investments.
By the end of 2019, it is predicted that RPA software will be widely used in almost 75% of the financial services. Robotic Process Automation automates repetitive human processes with ease and does not require manual help for the same. Although the implementation of robots is too high and would cost around $40K–$50K per robot, it is better than employing someone who is less efficient and takes more time than cost included to implement a robot.
3. Cloud And Quantum Computing
Cloud and quantum computing is one of the best ways to offer digitization and regulatory compliance with banks and financial institutions. These FinTech services are enabling financial institutions to become more visible and accessible to the end-user. Cloud computing help financial sector to quickly develop new applications, add more online services, and thereby improve customer experience. Also, the integration of complex data analytics has transformed the way financial was being done due to its ability to process large unstructured data effectively.
In 2019 it is expected that the financial sectors will achieve a comprehensive IT architecture on cloud platforms. For that to happen they might require to hire FinTech application developers who can assist them with the latest financial technologies and trends. Along with cloud computing, these sectors will be adopting quantum technology to deliver products o their end consumer in an improved and efficient way.
4. FinTech App Development and Open Bank Concept
Almost 75% of larger banks will be actively engaged in supporting FinTech application development through open banking concept PSD2. FinTech app development companies will have to hire software development services to develop solutions that can widely be used to enhance the efficiency of the sector. Keeping in mind the safety and security of the financial institutes, third-party enrollment will be taken into consideration to maintain customer transaction records and to further utilize the data for creating products.
5. Blockchain Adoption
There is no doubt that blockchain technology is the best and the most helpful FinTech innovation. It is a decentralized digital ledger that ensures that no single user has full access to the critical data. When it comes to FinTech, blockchain ensures efficiency via the elimination of intermediary step, accountability with immutable audit trials, compressing transactions, settlements processes, and avoiding the paperwork with the digital ledger to store all the records. Identification of a person becomes easier with blockchain who is involved in financial transactions such as loaning and investments.
The Bottom Line
FinTech is still an untouched frontier as many of the technologies and paradigms are still in their developmental stages. The financial sector is shifting towards mobile and digital and for that embracing technology is of utmost importance. It not only streamline the processes but also make the system more secure and accurate. So, we need not to wait for longer, the brighter finance is almost around the corner. All you need to do is keep yourself updated about Fintech trends and technologies being launched. This will not only help you to enhance your knowledge but will also help you to grow your financial business effectively. Integration of newer technologies can help in expanding the business and deliver the most appropriate services to the end users.