The financial sector has seen strong growth in recent years. Due to an uptick in creativity and technological expansion in nearly every market ecosystem, especially the FinTech component in the mix. But after the tragic spread of the fatal and contagious coronavirus across the globe, things changed. The entire industry is under pressure, and the future of FinTech apps has come to a halt.
What is FinTech?
FinTech is a fusion of two concepts — Finance + Technology. FinTech explains the emerging technologies that are in the ongoing process of evolving, updating, and automating the use and delivery of financial services. With its assistance, FinTech software is available for the proper management of financial activities and processes by both company owners and businesses.
Initially set up to offer financial services, it now encompasses a range of financial operations, such as finance, education, wealth management, retail, accounting, and more. Moreover, it also plays a pivotal role in the use and creation of a modern form of money, e.g., cryptocurrency such as Bitcoin.
FinTech Apps Trends
Even if the COVID situation returns to usual, it seems that consumers will have to migrate to virtual financial systems such as digital transfers, internet banking, Robo-advisories, lending, and more. Here are some future trends to watch out for.
1. Future of FinTech Apps: Biometric Security Systems
FinTech and social banking platforms also made banking more accessible to all. However, it is also valid that it has posed several security issues, as cybercrime linked to banking is rising.
It necessitates the introduction of appropriate protection procedures, which FinTech firms must formulate. Biometric protection systems have emerged as a reliable and foolproof security measure that raises the bar. It gives consumers and organizations assurance that their data is safe and secure.
The biometric industry is currently transforming as a result of big changes. Physical touch-based biometric sensors are anticipated to decrease. Contactless biometric solutions are expected to replace touch-based biometric solutions in the coming years.
The COVID-19 pandemic is a big cause of this transition. People are avoiding the use of cash and any other kind of payment that requires contact. As a result, contactless biometric authentication solutions are becoming more common in the aftermath of COVID-19.
2. Future of FinTech Apps: Neobanking
With conventional banking behemoths unable to keep up with technology-first activities, Neobanks will be one of the year’s most important developments. Today, FinTech products and services are redefining the heart of finance, and when service offerings consolidate, FinTech startups can begin to resemble banks in several respects. And as India grows more technologically savvy. Neobanks are bound to become the trend and evolve as one of the leading innovation fields. Also, established banks are likely to take heed and spend aggressively on technologies. But newcomers would have an advantage in creativity and digital-first plays.
Neobanks is emerging as a competitive alternative to the conventional bank branch model. Here, supermarket stores are turned into mini-ATMs for cash deposits and withdrawals.
3. Future of FinTech Apps: RPA
Robotic Process Automation (RPA) is a process automation system that uses software robotics or robotic staff to automate processes that humans typically do. RPA has also been introduced in the financial services sector to minimize risks and boost overall corporate efficiencies.
Not just that, but financial companies have used RPA automated staff to simplify a variety of back-office procedures such as compliance reviews, consumer onboarding, account maintenance and closure, trial balancing, credit card and mortgage collection, and several others.
The main advantage of RPA is that automated staff can complete these activities more effectively and easily, enabling financial institution employees to concentrate on more essential fields such as customer support.
4. Future of FinTech Apps: Open Banking
Open banking is a game-changing technology that links FinTech and banks, allowing data to migrate through organizations.
- It is directly connected to PSD2 (Second Payment Services Directive). It requires banks to release their data in a stable, consistent format. Information can be exchanged more conveniently and electronically between approved entities.
- It enables third-party applications to monitor consumers’ banking and other financial details through data sharing through APIs and AI.
Many market players already expect that open banking would reshape the banking industry as we know it. And not for no cause.
According to reports, open banking raised $7.29 billion in 2018 and is projected to grow to $43.15 billion by 2026. Financial firms require FinTech, and FinTech requires community banks and credit unions. As a result of this demand, transparent banking relationships will provide consumers with a fully consolidated view of their financial accounts, making them simpler to handle. Consequently, transparent banking goods and services are projected to facilitate stronger financial decision making, lower debt, and increased long-term wealth creation. It also benefiting banking companies, FinTech employees, customers, API sector figures, and even underserved populations.
As it encourages banks to become more transparent, it also poses specific unanswered questions, such as data storage and security threat management. However, raising knowledge and collaborating through organizations will help prevent problems and provide customers with value-added services.
5. Future of FinTech Apps: Mobile Money
In addition to E-Banking, there are several channels by which customers can pay or be charged. This low-cost initiative has been well-known worldwide, allowing consumers to make money, submit the money, and pass money to a bank. E.g., Vodafone, one of the leading telecom operators in India, has launched its M-Pesa mobile-based money transfer technology.
One of the key factors why Mobile Money has been so common. It is so that people no longer have to think about internet banking, credit cards, passwords, PINs, and other similar issues. Similarly, finance sectors such as life insurance and general insurance will leverage this program to draw new clients and renew current policies.
Moving to the Unreached
When emerging innovations and ideas like blockchain, on-demand markets, and others are discussed. It’s essential to concentrate on the benefits they are going to offer to the middle class and upper crust of society.
Fintech is expected to reach and create a difference in rural and urban areas where financial problems are real. It is unavoidable given that, according to a World Bank survey, about 1.7 billion citizens either need links to or are not a member of a substantial financial system.
Since FinTech’s strengths are perfect, we should anticipate FinTech services trends like this to extend to these business segments.
The Next Step
Experts ask FinTech organizations and startups to take immediate action. Thus, to place more emphasis on their cash flow and balance sheet management to remain relevant. Research also means that there will be a significant reduction in business and consumer spending. Thus, it will result in less transaction-based revenue.
Therefore, the FinTech app development company should focus on serious financial challenges waiting at their doorstep. Thus, focus on ‘new normal’ to reduce costs and remain sustainable in this difficult period.
The New Normal for FinTech
Previously, the ‘original model’ for FinTech means how many clients financial companies have with them. But in today’s modern world, ‘fresh standard’ means that consumers are anyone who can pay for goods and services.
For Financial institutions, the ‘fresh standard’ determines main performance indicators based on the nature of the products being produced to the consumers. Also, the latest generation of FinTech – the Neobanks – is poised to become a new normal. Why? That is because they have been the strongest solution to the conventional banking model and have greatly increased competition. Modern banks have also become a new-age understanding of all financial services (banking services also).
The COVID pandemic has helped the financial industry that they are digital. Only financial service providers and do not need any physical appearance. They come with procedures that run in a digital mode. It can be done either through the bank’s website or through the banking app.
Another ‘modern trend’ is a constant shift in the function of negotiators. The days are over where customers have to use their financial services by intermediaries (like advisors or brokers). Today, during the pandemic, they are digitally doing their financial roles and have generally denied intermediaries’ value. After receiving details on the ‘new standard’ for the FinTech market. Now, the time has come to reflect on the evidence that will enable FinTech to grow successfully after COVID-19.
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